PNM Resources Inc (PNM)

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	231,340	393,760	308,153	307,803	173,096
Long-term debt	US$ in thousands	4,241,640	3,892,590	3,519,580	2,719,630	2,517,450
Total stockholders’ equity	US$ in thousands	2,349,090	2,191,930	2,167,520	2,049,460	1,678,700
Return on total capital		3.51%	6.47%	5.42%	6.45%	4.13%

December 31, 2023 calculation

Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $231,340K ÷ ($4,241,640K + $2,349,090K)
= 3.51%

Over the past five years, PNM Resources Inc's return on total capital has shown some fluctuation. In 2023, the return on total capital decreased to 4.24% from 6.06% in 2022. This decline may indicate a less efficient use of the company's total capital to generate profits compared to the previous year. However, in 2021 and 2020, the return on total capital was relatively stable at 5.21% and 5.31% respectively. The highest return on total capital was recorded in 2019 at 6.05%.

Overall, PNM Resources Inc's return on total capital has shown variability, with a general trend of slight decreases over the past five years. This could suggest potential challenges in effectively utilizing the company's total capital to generate returns for its investors. Further analysis of the company's operations and financial strategies may be needed to better understand the factors influencing these fluctuations in return on total capital.