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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Qualcomm Inc., economic profit calculation

US$ in millions

12 months ended:	Sep 24, 2023	Sep 25, 2022	Sep 26, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Net operating profit after taxes (NOPAT)¹	5,865)	13,145)	8,512)	4,798)	5,963)	(3,095)
Cost of capital²	14.93%	14.92%	14.95%	14.84%	14.24%	13.90%
Invested capital³	31,383)	29,132)	20,003)	17,459)	21,089)	18,490)

Economic profit⁴	1,180)	8,798)	5,523)	2,208)	2,959)	(5,665)

Based on: 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 5,865 – 14.93% × 31,383 = 1,180

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Qualcomm Inc. economic profit increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Qualcomm Inc., NOPAT calculation

US$ in millions

12 months ended:	Sep 24, 2023	Sep 25, 2022	Sep 26, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Net income (loss)	7,232)	12,936)	9,043)	5,198)	4,386)	(4,864)
Deferred income tax expense (benefit)¹	(1,626)	(9)	(237)	(216)	1,937)	2,042)
Increase (decrease) in unearned revenues²	(121)	(463)	(353)	(396)	(395)	(385)
Increase (decrease) in equity equivalents³	(1,747)	(472)	(590)	(612)	1,542)	1,657)
Interest expense	694)	490)	559)	602)	627)	768)
Interest expense, operating lease liability⁴	39)	37)	26)	20)	12)	13)
Adjusted interest expense	733)	527)	585)	622)	639)	781)
Tax benefit of interest expense⁵	(154)	(111)	(123)	(131)	(134)	(193)
Adjusted interest expense, after taxes⁶	579)	416)	462)	492)	505)	588)
(Gain) loss on marketable securities	(75)	363)	(427)	(198)	(295)	(21)
Interest and dividend income	(313)	(91)	(83)	(156)	(300)	(611)
Investment income, before taxes	(388)	272)	(510)	(354)	(595)	(632)
Tax expense (benefit) of investment income⁷	81)	(57)	107)	74)	125)	156)
Investment income, after taxes⁸	(307)	215)	(403)	(280)	(470)	(476)
(Income) loss from discontinued operations, net of tax⁹	107)	50)	—)	—)	—)	—)
Net operating profit after taxes (NOPAT)	5,865)	13,145)	8,512)	4,798)	5,963)	(3,095)

Based on: 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in unearned revenues.

³ Addition of increase (decrease) in equity equivalents to net income (loss).

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 669 × 5.90% = 39

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 733 × 21.00% = 154

⁶ Addition of after taxes interest expense to net income (loss).

⁷ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 388 × 21.00% = 81

⁸ Elimination of after taxes investment income.

⁹ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Qualcomm Inc. NOPAT increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Qualcomm Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Sep 24, 2023	Sep 25, 2022	Sep 26, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Income tax provision from continuing operations	104)	2,012)	1,231)	521)	3,095)	5,377)
Less: Deferred income tax expense (benefit)	(1,626)	(9)	(237)	(216)	1,937)	2,042)
Add: Tax savings from interest expense	154)	111)	123)	131)	134)	193)
Less: Tax imposed on investment income	81)	(57)	107)	74)	125)	156)
Cash operating taxes	1,803)	2,189)	1,484)	793)	1,167)	3,372)

Based on: 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Qualcomm Inc. cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Qualcomm Inc., invested capital calculation (financing approach)

US$ in millions

	Sep 24, 2023	Sep 25, 2022	Sep 26, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Short-term debt	914)	1,945)	2,044)	500)	2,496)	1,005)
Long-term debt	14,484)	13,537)	13,701)	15,226)	13,437)	15,365)
Operating lease liability¹	669)	677)	554)	505)	354)	375)
Total reported debt & leases	16,067)	16,159)	16,299)	16,231)	16,287)	16,745)
Stockholders’ equity	21,581)	18,013)	9,950)	6,077)	4,909)	928)
Net deferred tax (assets) liabilities²	(3,199)	(1,636)	(1,527)	(1,295)	(1,093)	(613)
Unearned revenues³	392)	513)	976)	1,329)	1,725)	2,120)
Equity equivalents⁴	(2,807)	(1,123)	(551)	34)	632)	1,507)
Accumulated other comprehensive (income) loss, net of tax⁵	(358)	22)	(128)	(207)	(100)	(265)
Adjusted stockholders’ equity	18,416)	16,912)	9,271)	5,904)	5,441)	2,170)
Construction in progress⁶	(226)	(330)	(269)	(134)	(182)	(79)
Marketable securities⁷	(2,874)	(3,609)	(5,298)	(4,542)	(457)	(346)
Invested capital	31,383)	29,132)	20,003)	17,459)	21,089)	18,490)

Based on: 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of unearned revenues.

⁴ Addition of equity equivalents to stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of construction in progress.

⁷ Subtraction of marketable securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Qualcomm Inc. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Qualcomm Inc., cost of capital calculations

Sep 24, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	123,421)	123,421)	÷	138,390)	=	0.89	0.89	×	16.32%	=	14.55%
Debt³	14,300)	14,300)	÷	138,390)	=	0.10	0.10	×	4.35% × (1 – 21.00%)	=	0.36%
Operating lease liability⁴	669)	669)	÷	138,390)	=	0.00	0.00	×	5.90% × (1 – 21.00%)	=	0.02%
Total:	138,390)					1.00					14.93%

Based on: 10-K (reporting date: 2023-09-24).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 25, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	126,113)	126,113)	÷	141,289)	=	0.89	0.89	×	16.32%	=	14.56%
Debt³	14,499)	14,499)	÷	141,289)	=	0.10	0.10	×	4.18% × (1 – 21.00%)	=	0.34%
Operating lease liability⁴	677)	677)	÷	141,289)	=	0.00	0.00	×	5.41% × (1 – 21.00%)	=	0.02%
Total:	141,289)					1.00					14.92%

Based on: 10-K (reporting date: 2022-09-25).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 26, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	155,098)	155,098)	÷	173,152)	=	0.90	0.90	×	16.32%	=	14.61%
Debt³	17,500)	17,500)	÷	173,152)	=	0.10	0.10	×	4.02% × (1 – 21.00%)	=	0.32%
Operating lease liability⁴	554)	554)	÷	173,152)	=	0.00	0.00	×	4.75% × (1 – 21.00%)	=	0.01%
Total:	173,152)					1.00					14.95%

Based on: 10-K (reporting date: 2021-09-26).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 27, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	145,865)	145,865)	÷	164,370)	=	0.89	0.89	×	16.32%	=	14.48%
Debt³	18,000)	18,000)	÷	164,370)	=	0.11	0.11	×	4.02% × (1 – 21.00%)	=	0.35%
Operating lease liability⁴	505)	505)	÷	164,370)	=	0.00	0.00	×	4.00% × (1 – 21.00%)	=	0.01%
Total:	164,370)					1.00					14.84%

Based on: 10-K (reporting date: 2020-09-27).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 29, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	96,634)	96,634)	÷	113,988)	=	0.85	0.85	×	16.32%	=	13.83%
Debt³	16,999)	16,999)	÷	113,988)	=	0.15	0.15	×	3.41% × (1 – 21.00%)	=	0.40%
Operating lease liability⁴	354)	354)	÷	113,988)	=	0.00	0.00	×	3.41% × (1 – 21.00%)	=	0.01%
Total:	113,988)					1.00					14.24%

Based on: 10-K (reporting date: 2019-09-29).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	76,621)	76,621)	÷	93,096)	=	0.82	0.82	×	16.32%	=	13.43%
Debt³	16,100)	16,100)	÷	93,096)	=	0.17	0.17	×	3.55% × (1 – 24.76%)	=	0.46%
Operating lease liability⁴	375)	375)	÷	93,096)	=	0.00	0.00	×	3.55% × (1 – 24.76%)	=	0.01%
Total:	93,096)					1.00					13.90%

Based on: 10-K (reporting date: 2018-09-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Qualcomm Inc., economic spread ratio calculation, comparison to benchmarks

	Sep 24, 2023	Sep 25, 2022	Sep 26, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	1,180)	8,798)	5,523)	2,208)	2,959)	(5,665)
Invested capital²	31,383)	29,132)	20,003)	17,459)	21,089)	18,490)
Performance Ratio
Economic spread ratio³	3.76%	30.20%	27.61%	12.64%	14.03%	-30.64%
Benchmarks
Economic Spread Ratio, Competitors⁴
Advanced Micro Devices Inc.	-19.21%	-18.93%	37.80%	11.54%	-6.59%	—
Analog Devices Inc.	-6.86%	-8.22%	-11.49%	-6.55%	-5.01%	-7.80%
Applied Materials Inc.	19.06%	28.92%	24.45%	12.62%	12.24%	20.31%
Broadcom Inc.	9.62%	8.04%	-1.34%	-6.89%	-6.59%	-2.38%
Intel Corp.	-13.27%	-6.84%	10.35%	16.02%	14.11%	—
KLA Corp.	25.23%	27.47%	16.14%	4.98%	6.47%	24.64%
Lam Research Corp.	11.53%	26.13%	25.60%	8.60%	5.13%	10.30%
Micron Technology Inc.	-25.49%	2.35%	-2.18%	-7.78%	2.40%	25.00%
NVIDIA Corp.	-8.88%	33.32%	13.75%	-0.24%	60.35%	—
ON Semiconductor Corp.	0.44%	2.34%	-2.01%	-13.33%	-9.88%	—
Texas Instruments Inc.	15.73%	36.40%	35.01%	30.16%	29.84%	—

Based on: 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,180 ÷ 31,383 = 3.76%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Qualcomm Inc. economic spread ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Qualcomm Inc., economic profit margin calculation, comparison to benchmarks

	Sep 24, 2023	Sep 25, 2022	Sep 26, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	1,180)	8,798)	5,523)	2,208)	2,959)	(5,665)

Revenues	35,820)	44,200)	33,566)	23,531)	24,273)	22,732)
Add: Increase (decrease) in unearned revenues	(121)	(463)	(353)	(396)	(395)	(385)
Adjusted revenues	35,699)	43,737)	33,213)	23,135)	23,878)	22,347)
Performance Ratio
Economic profit margin²	3.31%	20.12%	16.63%	9.54%	12.39%	-25.35%
Benchmarks
Economic Profit Margin, Competitors³
Advanced Micro Devices Inc.	-49.04%	-46.94%	14.25%	5.16%	-3.34%	—
Analog Devices Inc.	-24.63%	-30.80%	-73.83%	-21.28%	-15.36%	-23.42%
Applied Materials Inc.	12.78%	16.70%	15.60%	9.60%	8.49%	11.99%
Broadcom Inc.	16.83%	15.04%	-3.15%	-19.02%	-17.51%	-5.09%
Intel Corp.	-22.53%	-9.62%	11.60%	16.87%	15.81%	—
KLA Corp.	20.04%	23.23%	15.91%	5.58%	9.04%	15.97%
Lam Research Corp.	10.04%	18.96%	18.28%	8.42%	4.48%	8.96%
Micron Technology Inc.	-87.70%	4.03%	-3.64%	-15.35%	3.97%	29.12%
NVIDIA Corp.	-7.03%	22.34%	10.75%	-0.32%	24.64%	—
ON Semiconductor Corp.	0.58%	2.63%	-2.26%	-17.47%	-12.28%	—
Texas Instruments Inc.	20.28%	31.92%	31.32%	27.04%	25.02%	—

Based on: 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 1,180 ÷ 35,699 = 3.31%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Qualcomm Inc. economic profit margin improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Qualcomm Inc. (NASDAQ:QCOM)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin