PNM Resources Inc (PNM)

Return on total capital

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	231,340	334,610	430,721	424,783	393,760	376,278	345,244	333,055	308,153	309,393	319,026	337,675	307,803	335,682	316,638	134,832	173,095	69,157	57,751	223,390
Long-term debt	US$ in thousands	4,241,640	3,902,690	3,927,620	3,668,080	3,892,590	3,893,500	3,573,090	3,620,040	3,519,580	3,395,980	3,186,050	2,205,130	2,719,630	2,509,750	2,437,250	2,468,720	2,517,450	2,467,000	2,672,160	2,771,940
Total stockholders’ equity	US$ in thousands	2,349,090	2,235,210	2,262,240	2,212,190	2,191,930	2,201,880	2,131,520	2,115,530	2,167,520	2,144,950	2,088,230	2,030,970	2,049,460	1,773,320	1,696,500	1,627,220	1,678,700	1,670,910	1,612,150	1,684,680
Return on total capital		3.51%	5.45%	6.96%	7.22%	6.47%	6.17%	6.05%	5.81%	5.42%	5.58%	6.05%	7.97%	6.45%	7.84%	7.66%	3.29%	4.13%	1.67%	1.35%	5.01%

December 31, 2023 calculation

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

PNM Resources Inc's return on total capital has shown variability over the past eight quarters. The return ranged from a low of 4.24% in Q4 2023 to a high of 6.34% in Q1 2023. The trend indicates a general fluctuation in the company's efficiency in generating returns from its total capital employed. Overall, the average return on total capital for the period analyzed was 5.67%. This metric is crucial as it provides insights into the company's ability to generate profits relative to the total capital invested, reflecting its operational efficiency and profitability.