NRG Energy Inc. (NRG)
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 | 454,000 | 2,080,000 | 3,344,000 | 1,162,000 | 1,517,000 |
| Long-term debt | US$ in thousands | — | 7,976,000 | 7,966,000 | 8,691,000 | 5,803,000 |
| Total stockholders’ equity | US$ in thousands | 2,906,000 | 3,828,000 | 3,600,000 | 1,680,000 | 1,678,000 |
| Return on total capital | 15.62% | 17.62% | 28.91% | 11.20% | 20.28% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $454,000K ÷ ($—K + $2,906,000K)
= 15.62%
The return on total capital for NRG Energy Inc. has displayed fluctuations over the past five years. In 2023, the return on total capital was negative at -7.56%, indicating that the company's total capital generated a negative return during that year. This contrasts with the previous year, 2022, when the return on total capital was significantly higher at 18.79%, suggesting improved capital efficiency and profitability.
Looking further back, in 2021, the return on total capital peaked at 32.39%, showcasing strong capital utilization and profitability. However, in 2020, the return on total capital decreased to 11.51%, indicating a drop in the company's efficiency in generating returns from its total capital. Similarly, in 2019, the return on total capital was 17.39%, reflecting a moderate level of profitability and capital efficiency for that year.
Overall, the fluctuating trend in NRG Energy Inc.'s return on total capital underscores the company's varying success in generating returns from its total capital base over the past five years. It is important for stakeholders to closely monitor these fluctuations and assess the factors driving these changes to make informed decisions about the company's financial performance and future prospects.
Peer comparison
Dec 31, 2023