NRG Energy Inc. (NRG)
Return on total capital
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 2,099,000 | 458,000 | 2,080,000 | 3,344,000 | 1,162,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 2,478,000 | 2,906,000 | 3,828,000 | 3,600,000 | 1,680,000 |
| Return on total capital | 84.71% | 15.76% | 54.34% | 92.89% | 69.17% |
December 31, 2024 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $2,099,000K ÷ ($—K + $2,478,000K)
= 84.71%
NRG Energy Inc.'s return on total capital has shown significant fluctuations over the five-year period from 2020 to 2024. The return on total capital increased from 69.17% in 2020 to 92.89% in 2021, indicating improved efficiency in generating profits from the total capital employed. However, there was a decline in the return on total capital to 54.34% in 2022, possibly due to changes in the company's capital structure or operational performance.
In 2023, the return on total capital plummeted to 15.76%, which suggests that NRG Energy Inc. faced challenges in generating profits relative to the total capital invested. However, there was a notable recovery in 2024, with the return on total capital rising to 84.71%. This improvement could indicate the company's successful initiatives to enhance profitability and operational efficiency.
Overall, the return on total capital for NRG Energy Inc. has displayed variability, reflecting the company's ability to effectively utilize its capital resources to generate profits. Investors and stakeholders may closely monitor this ratio to assess the company's financial performance and capital allocation strategies.
Peer comparison
Dec 31, 2024