Kaiser Aluminum Corporation (KALU)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 103,200 | 10,400 | 25,500 | 79,700 | 105,000 |
| Long-term debt | US$ in thousands | 1,039,800 | 1,038,100 | 1,036,300 | 838,100 | 492,600 |
| Total stockholders’ equity | US$ in thousands | 652,200 | 631,200 | 692,500 | 732,400 | 733,900 |
| Return on total capital | 6.10% | 0.62% | 1.48% | 5.07% | 8.56% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $103,200K ÷ ($1,039,800K + $652,200K)
= 6.10%
Kaiser Aluminum Corp's return on total capital has exhibited fluctuations over the past five years. The return on total capital was robust at 12.30% in 2019, indicating the company's effective utilization of its total capital to generate profits. However, the return on total capital declined significantly to 5.60% in 2020, possibly due to changes in market conditions or internal factors impacting profitability.
Subsequently, in 2021, the return on total capital improved slightly to 3.68%, but remained relatively low compared to previous years. This indicates that the company may have faced challenges in optimizing its capital structure and operational efficiency during that period.
In 2022, there was a further decrease in the return on total capital to 1.60%, which suggests that Kaiser Aluminum Corp faced difficulties in generating profits relative to the total capital employed. However, there was a notable improvement in 2023, with the return on total capital increasing to 5.95%. This improvement could be attributed to strategic initiatives or operational changes undertaken by the company to enhance profitability and efficiency.
Overall, the fluctuation in Kaiser Aluminum Corp's return on total capital over the years indicates the company's varying ability to generate profits from its total capital base and underscores the importance of closely monitoring and managing capital allocation strategies to drive sustainable financial performance.
Peer comparison
Dec 31, 2023