Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
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
Apple Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 112,234 – 19.07% × 88,915 = 95,273
The financial trajectory from 2020 to 2025 indicates a sustained capacity for value creation, as economic profit remained positive throughout the period. The company has consistently generated returns that exceed its cost of capital, although the rate of value creation has experienced fluctuations in correlation with shifts in invested capital and operating profits.
- Net Operating Profit After Taxes (NOPAT)
- A significant expansion in NOPAT occurred between 2020 and 2022, rising from 58,673 million to a peak of 101,652 million. A period of moderate contraction followed in 2023 and 2024, with values stabilizing around 91,849 million to 94,296 million. However, a sharp recovery is observed in 2025, where NOPAT reached its highest point at 112,234 million, suggesting a strong resurgence in operational efficiency or market demand.
- Cost of Capital
- A consistent and marginal upward trend is evident in the cost of capital, which climbed steadily from 18.37% in 2020 to 19.07% by 2025. This gradual increase suggests a rising threshold for the minimum required return on invested capital, potentially reflecting broader macroeconomic shifts or changes in the risk profile of the capital structure.
- Invested Capital
- Invested capital exhibited volatility, characterized by a general increase from 36,252 million in 2020 to 60,243 million in 2023. A notable reduction to 50,072 million occurred in 2024, followed by a substantial surge to 88,915 million in 2025. This sharp increase in the final year indicates a significant deployment of resources into the business, likely intended to drive future growth or sustain the observed peak in NOPAT.
- Economic Profit
- Economic profit grew rapidly from 52,013 million in 2020 to a peak of 92,923 million in 2022. A subsequent plateau was observed between 2023 and 2024, with profits remaining relatively flat at approximately 82,000 million. By 2025, economic profit recovered to 95,273 million. The fact that economic profit remained positive despite the rising cost of capital confirms that the company continued to create shareholder value throughout the entire analyzed duration.
The relationship between invested capital and economic profit suggests a highly efficient use of assets. While the massive increase in invested capital in 2025 represents a significant financial commitment, the concurrent rise in NOPAT and economic profit indicates that these investments were immediately accretive to the company's overall value.
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Net Operating Profit after Taxes (NOPAT)
Apple Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in deferred revenue.
3 Addition of increase (decrease) in equity equivalents to net income.
4 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 12,490 × 3.40% = 425
5 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 425 × 21.00% = 89
6 Addition of after taxes interest expense to net income.
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -414 × 21.00% = -87
8 Elimination of after taxes investment income.
- Net Income Trend
- Over the observed periods, net income exhibits an overall upward trajectory with some fluctuations. Starting at 57,411 million USD in 2020, there is a substantial increase to 94,680 million USD in 2021. This growth continues moderately to 99,803 million USD in 2022. However, a decline is noted in 2023 and 2024, with net income decreasing to 96,995 million USD and then further to 93,736 million USD, respectively. By 2025, net income rebounds strongly to reach a new peak of 112,010 million USD, indicating recovery and growth surpassing previous highs.
- Net Operating Profit After Taxes (NOPAT) Development
- NOPAT follows a pattern generally similar to net income but with higher values each year, suggesting efficient operational profitability. Beginning at 58,673 million USD in 2020, there is an increase to 91,407 million USD in 2021. Growth continues, peaking at 101,652 million USD in 2022. A decline follows in 2023 and 2024, with NOPAT reducing to 94,296 million USD and 91,849 million USD, respectively. By 2025, NOPAT increases significantly to 112,234 million USD, slightly exceeding net income, which reflects enhanced operational efficiency and profitability.
- Comparative Observations
- Both net income and NOPAT demonstrate strong growth from 2020 to 2022, followed by a moderate downtrend in 2023 and 2024. The consistent lead of NOPAT over net income across all periods implies effective cost and tax management at the operational level. The sharp rise in 2025 for both metrics indicates a robust financial performance recovery and enhancement relative to prior years, suggesting strengthened earnings capability and possibly improved operational strategies or market conditions.
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Cash Operating Taxes
Apple Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26).
- Provision for Income Taxes
- The provision for income taxes shows an overall increasing trend from 9,680 million USD in 2020 to a peak of 29,749 million USD in 2024, followed by a decline to 20,719 million USD in 2025. This pattern suggests variability in taxable income or changes in tax rates over the period. The sharp rise between 2023 and 2024 indicates a significant increase in tax expense, which substantially decreases the following year.
- Cash Operating Taxes
- Cash operating taxes also exhibit a rising trend from 9,729 million USD in 2020 to 32,898 million USD in 2024, aligning with the upward movement in income tax provision. The cash taxes peak in 2024 and then decrease to 22,234 million USD in 2025. This correlation with the provision for income taxes highlights increased tax payments matching the higher tax expense recorded, with both showing a marked increase in the 2023-2024 timeframe before receding.
- Insights and Comparison
- The close movement of provision for income taxes and cash operating taxes indicates consistency between tax accruals and actual tax payments over time. The notable spikes in both metrics during 2023-2024 suggest either a period of elevated profitability, changes in tax legislation, or other factors influencing taxable income and cash outflows related to taxes. The subsequent decline in 2025 may reflect adjustments, reductions in taxable income, or deferred tax strategies.
- Conclusion
- The tax-related financial data reveal a pattern of rising tax expenses and payments over most of the observed period, peaking in 2024 before decreasing in the final year. Continuous monitoring is advisable to understand the underlying causes of these fluctuations and their impact on the company's effective tax rate and cash flow management.
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Invested Capital
Apple Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of deferred revenue.
4 Addition of equity equivalents to shareholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of marketable securities.
- Total Reported Debt & Leases
- The total reported debt and leases demonstrate a fluctuating downward trend over the six-year period. Starting at US$122,278 million in 2020, the value peaks in 2021 at US$136,522 million, then generally declines each subsequent year, reaching US$112,377 million in 2025. This indicates a progressive reduction in the company's debt and lease obligations after 2021, suggesting an improvement in leverage management or a shift in financing strategy.
- Shareholders' Equity
- Shareholders' equity exhibits variability throughout the examined period. It begins at US$65,339 million in 2020 and decreases slightly to US$63,090 million in 2021. A more pronounced drop occurs in 2022, with equity declining to US$50,672 million. However, this is followed by a recovery in 2023 to US$62,146 million, a slight decrease in 2024, and a significant increase to US$73,733 million in 2025. The volatility in equity suggests periods of share repurchases, dividend payments, or other equity transactions impacting the book value.
- Invested Capital
- Invested capital shows a consistent upward trend with some fluctuations. Starting at US$36,252 million in 2020, it increases steadily through 2021 and 2022, reaching US$46,661 million. There is a notable rise in 2023 to US$60,243 million, followed by a drop to US$50,072 million in 2024. The figure peaks significantly at US$88,915 million in 2025. This overall growth in invested capital could indicate increased asset investments or changes in working capital, reflecting expansion or reinvestment strategies.
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Cost of Capital
Apple Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 3,995,083) | 3,995,083) | ÷ | 4,097,182) | = | 0.98 | 0.98 | × | 19.46% | = | 18.97% | ||
| Commercial paper, term debt, and finance leases3 | 89,609) | 89,609) | ÷ | 4,097,182) | = | 0.02 | 0.02 | × | 5.56% × (1 – 21.00%) | = | 0.10% | ||
| Operating lease liability4 | 12,490) | 12,490) | ÷ | 4,097,182) | = | 0.00 | 0.00 | × | 3.40% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 4,097,182) | 1.00 | 19.07% | ||||||||||
Based on: 10-K (reporting date: 2025-09-27).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, term debt, and finance leases. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 3,369,468) | 3,369,468) | ÷ | 3,480,265) | = | 0.97 | 0.97 | × | 19.46% | = | 18.84% | ||
| Commercial paper, term debt, and finance leases3 | 99,263) | 99,263) | ÷ | 3,480,265) | = | 0.03 | 0.03 | × | 6.47% × (1 – 21.00%) | = | 0.15% | ||
| Operating lease liability4 | 11,534) | 11,534) | ÷ | 3,480,265) | = | 0.00 | 0.00 | × | 3.10% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 3,480,265) | 1.00 | 18.99% | ||||||||||
Based on: 10-K (reporting date: 2024-09-28).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, term debt, and finance leases. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 2,747,394) | 2,747,394) | ÷ | 2,857,021) | = | 0.96 | 0.96 | × | 19.46% | = | 18.71% | ||
| Commercial paper, term debt, and finance leases3 | 97,809) | 97,809) | ÷ | 2,857,021) | = | 0.03 | 0.03 | × | 6.53% × (1 – 21.00%) | = | 0.18% | ||
| Operating lease liability4 | 11,818) | 11,818) | ÷ | 2,857,021) | = | 0.00 | 0.00 | × | 3.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 2,857,021) | 1.00 | 18.90% | ||||||||||
Based on: 10-K (reporting date: 2023-09-30).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, term debt, and finance leases. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 2,477,530) | 2,477,530) | ÷ | 2,598,723) | = | 0.95 | 0.95 | × | 19.46% | = | 18.55% | ||
| Commercial paper, term debt, and finance leases3 | 109,723) | 109,723) | ÷ | 2,598,723) | = | 0.04 | 0.04 | × | 4.53% × (1 – 21.00%) | = | 0.15% | ||
| Operating lease liability4 | 11,470) | 11,470) | ÷ | 2,598,723) | = | 0.00 | 0.00 | × | 2.30% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 2,598,723) | 1.00 | 18.71% | ||||||||||
Based on: 10-K (reporting date: 2022-09-24).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, term debt, and finance leases. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 2,457,678) | 2,457,678) | ÷ | 2,600,781) | = | 0.94 | 0.94 | × | 19.46% | = | 18.38% | ||
| Commercial paper, term debt, and finance leases3 | 132,148) | 132,148) | ÷ | 2,600,781) | = | 0.05 | 0.05 | × | 4.16% × (1 – 21.00%) | = | 0.17% | ||
| Operating lease liability4 | 10,955) | 10,955) | ÷ | 2,600,781) | = | 0.00 | 0.00 | × | 2.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 2,600,781) | 1.00 | 18.56% | ||||||||||
Based on: 10-K (reporting date: 2021-09-25).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, term debt, and finance leases. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,850,816) | 1,850,816) | ÷ | 1,982,754) | = | 0.93 | 0.93 | × | 19.46% | = | 18.16% | ||
| Commercial paper, term debt, and finance leases3 | 122,757) | 122,757) | ÷ | 1,982,754) | = | 0.06 | 0.06 | × | 4.16% × (1 – 21.00%) | = | 0.20% | ||
| Operating lease liability4 | 9,181) | 9,181) | ÷ | 1,982,754) | = | 0.00 | 0.00 | × | 2.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 1,982,754) | 1.00 | 18.37% | ||||||||||
Based on: 10-K (reporting date: 2020-09-26).
1 US$ in millions
2 Equity. See details »
3 Commercial paper, term debt, and finance leases. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Apple Inc., economic spread ratio calculation, comparison to benchmarks
| Sep 27, 2025 | Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 95,273) | 82,340) | 82,912) | 92,923) | 83,482) | 52,013) | |
| Invested capital2 | 88,915) | 50,072) | 60,243) | 46,661) | 42,700) | 36,252) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 107.15% | 164.44% | 137.63% | 199.15% | 195.51% | 143.48% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Arista Networks Inc. | 53.98% | 35.40% | 20.78% | 16.31% | 31.36% | — | |
| Cisco Systems Inc. | -6.40% | -3.27% | 3.42% | 3.39% | 2.64% | — | |
| Dell Technologies Inc. | -9.74% | -8.37% | -0.71% | 3.15% | -1.37% | — | |
| Lumentum Holdings Inc. | -23.21% | -28.94% | -18.96% | -6.28% | 6.04% | — | |
| Super Micro Computer Inc. | -12.87% | -11.23% | -1.14% | -9.37% | -17.80% | — | |
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 95,273 ÷ 88,915 = 107.15%
4 Click competitor name to see calculations.
The analysis of economic value added indicates a general upward trajectory in absolute economic profit over the six-year period, despite notable fluctuations in capital efficiency. The relationship between invested capital and economic profit demonstrates shifting dynamics in how value is generated relative to the capital base.
- Economic Profit Trends
- Economic profit experienced substantial growth between 2020 and 2022, rising from US$ 52,013 million to a peak of US$ 92,923 million. A period of relative stabilization followed from 2023 to 2024, where values remained in the US$ 82,000 million range, before reaching a period high of US$ 95,273 million in 2025.
- Invested Capital Dynamics
- Invested capital showed a consistent increase from 2020 through 2023, growing from US$ 36,252 million to US$ 60,243 million. After a contraction to US$ 50,072 million in 2024, a significant surge occurred in 2025, with invested capital reaching US$ 88,915 million.
- Economic Spread Ratio Analysis
- The economic spread ratio exhibited significant volatility throughout the period. An initial upward trend saw the ratio peak at 199.15% in 2022. A sharp decline occurred in 2023 to 137.63%, followed by a moderate recovery to 164.44% in 2024. By 2025, the ratio dropped to its lowest level of 107.15%. This final decline correlates with the sharp increase in invested capital, indicating that the expansion of the capital base outpaced the growth in economic profit during that fiscal year.
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Economic Profit Margin
Apple Inc., economic profit margin calculation, comparison to benchmarks
| Sep 27, 2025 | Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 95,273) | 82,340) | 82,912) | 92,923) | 83,482) | 52,013) | |
| Net sales | 416,161) | 391,035) | 383,285) | 394,328) | 365,817) | 274,515) | |
| Add: Increase (decrease) in deferred revenue | 900) | 700) | (300) | 500) | 1,700) | 2,100) | |
| Adjusted net sales | 417,061) | 391,735) | 382,985) | 394,828) | 367,517) | 276,615) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 22.84% | 21.02% | 21.65% | 23.54% | 22.72% | 18.80% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Arista Networks Inc. | 33.36% | 25.07% | 15.69% | 11.24% | 18.37% | — | |
| Cisco Systems Inc. | -10.31% | -5.29% | 3.40% | 3.80% | 2.94% | — | |
| Dell Technologies Inc. | -5.26% | -5.14% | -0.39% | 1.65% | -1.17% | — | |
| Lumentum Holdings Inc. | -42.94% | -65.14% | -31.11% | -9.17% | 6.82% | — | |
| Super Micro Computer Inc. | -6.64% | -5.71% | -0.39% | -3.98% | -6.42% | — | |
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 95,273 ÷ 417,061 = 22.84%
3 Click competitor name to see calculations.
Between 2020 and 2025, a general upward trajectory is observed in both absolute economic profit and adjusted net sales, indicating a sustained capacity for generating value in excess of the company's cost of capital. While there was a period of slight contraction between 2022 and 2024, the final period shows a recovery to new peak levels.
- Economic Profit Trends
- Absolute economic profit grew significantly from 52,013 million USD in 2020 to 95,273 million USD in 2025. A sharp increase was recorded between 2020 and 2021, followed by a peak in 2022 at 92,923 million USD. A moderate decline occurred through 2023 and 2024, before the metric reached its highest recorded value in 2025.
- Adjusted Net Sales Performance
- Adjusted net sales exhibited a strong growth pattern, rising from 276,615 million USD in 2020 to 417,061 million USD by 2025. A temporary dip is noted in 2023, where sales decreased to 382,985 million USD from the previous year's 394,828 million USD, before resuming a growth trajectory over the following two years.
- Economic Profit Margin Analysis
- The economic profit margin expanded from 18.80% in 2020 to a peak of 23.54% in 2022, reflecting increased efficiency in generating economic value relative to sales. This was followed by a gradual compression, with the margin falling to 21.65% in 2023 and reaching a local minimum of 21.02% in 2024. A recovery is evident in 2025, as the margin rose back to 22.84%.
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