MGE Energy Inc (MGEE)
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 | 146,385 | 137,743 | 117,294 | 109,997 | 110,910 |
| Long-term debt | US$ in thousands | 718,822 | 585,246 | 614,211 | 519,303 | 523,741 |
| Total stockholders’ equity | US$ in thousands | 1,140,070 | 1,081,670 | 1,027,470 | 976,000 | 855,676 |
| Return on total capital | 7.87% | 8.26% | 7.14% | 7.36% | 8.04% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $146,385K ÷ ($718,822K + $1,140,070K)
= 7.87%
The return on total capital for MGE Energy Inc has exhibited fluctuations over the past five years. In 2023, the return on total capital decreased to 7.87% from 8.26% in 2022. This downward trend follows a similar pattern in previous years, as the return on total capital was 7.14% in 2021, 7.36% in 2020, and 8.04% in 2019.
The average return on total capital over this five-year period is 7.73%. Despite some variability, MGE Energy Inc has maintained a relatively stable return on total capital within the range of 7.14% to 8.26%. It is important for the company to assess the reasons behind these fluctuations to ensure efficient utilization of capital and continued profitability in the future.