Air Canada (TSX:AC) ROCE %

: 6.69% (As of Dec. 2023)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Air Canada's annualized ROCE % for the quarter that ended in Dec. 2023 was 6.69%.

Air Canada ROCE % Historical Data

The historical data trend for Air Canada's ROCE % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Air Canada Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

12.46

-20.22

-14.26

-2.86

15.58

Air Canada Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROCE %																7.55	4.31	20.55	30.78	6.69

Air Canada ROCE % Calculation

Air Canada's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	3142	/	( ( (29507 - 9353)	+	(30197 - 10008) )	/ 2 )
	=	3142	/	( (20154	+	20189)	/ 2 )
	=	3142	/	20171.5
	=	15.58 %

Air Canada's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	1356	/	( ( (29697 - 9332)	+	(30197 - 10008) )	/ 2 )
	=	1356	/	( ( 20365	+	20189 )	/ 2 )
	=	1356	/	20277
	=	6.69 %

(1) Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

Air Canada (TSX:AC) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Air Canada ROCE % Related Terms

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Air Canada (TSX:AC) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Air Canada (TSX:AC) » Definitions » ROCE %

Comparable Companies

Traded in Other Exchanges

ACDVF:USA ADH2:Germany

Address

7373 Cote Vertu Boulevard West, Air Canada Centre, Saint-Laurent, QC, CAN, H4S 1Z3

Website

https://www.aircanada.com

Air Canada is Canada's largest airline, generally serving nearly 50 million passengers each year together with its low-cost sub-brand called Rouge and contracts for regional connection flights to its network. Air Canada is a sixth freedom airline, similar to Gulf carriers, which flies many U.S. nationals on long-haul trips with a layover in Canada. In 2022, the company generated CAD 16.6 billion in total revenue, down from CAD 19 billion in 2019 as the airline is still recovering from the pandemic and related travel restrictions.