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Microsoft Excel LibreOffice Calc


Economic Value Added (EVA)

Difficulty: Advanced


Economic Profit

Biogen Inc., economic profit calculation

USD $ in thousands

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net operating profit after taxes (NOPAT)1 hidden hidden hidden hidden hidden
Cost of capital2 hidden hidden hidden hidden hidden
Invested capital3 hidden hidden hidden hidden hidden
Economic profit4 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

2017 Calculations

1 NOPAT. See Details »

2 Cost of capital. See Details »

3 Invested capital. See Details »

4 Economic profit = NOPAT – Cost of capital × Invested capital
= hiddenhidden × hidden = hidden

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. Biogen Inc.'s economic profit declined from 2015 to 2016 and from 2016 to 2017.

Net Operating Profit after Taxes (NOPAT)

Biogen Inc., NOPAT calculation

USD $ in thousands

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income attributable to Biogen Inc. hidden hidden hidden hidden hidden
Deferred income tax expense (benefit)1 hidden hidden hidden hidden hidden
Increase (decrease) in reserves for allowances2 hidden hidden hidden hidden hidden
Increase (decrease) in restructuring reserve3 hidden hidden hidden hidden hidden
Increase (decrease) in equity equivalents4 hidden hidden hidden hidden hidden
Interest expense hidden hidden hidden hidden hidden
Interest expense, operating lease obligations5 hidden hidden hidden hidden hidden
Adjusted interest expense hidden hidden hidden hidden hidden
Tax benefit of interest expense6 hidden hidden hidden hidden hidden
Adjusted interest expense, after taxes7 hidden hidden hidden hidden hidden
(Gain) loss on marketable securities hidden hidden hidden hidden hidden
Interest income hidden hidden hidden hidden hidden
Investment income, before taxes hidden hidden hidden hidden hidden
Tax expense (benefit) of investment income8 hidden hidden hidden hidden hidden
Investment income, after taxes9 hidden hidden hidden hidden hidden
Net income (loss) attributable to noncontrolling interest hidden hidden hidden hidden hidden
Net operating profit after taxes (NOPAT) hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

2017 Calculations

1 Elimination of deferred tax expense. See Details »

2 Addition of increase (decrease) in reserves for allowances.

3 Addition of increase (decrease) in restructuring reserve.

4 Addition of increase (decrease) in equity equivalents to net income attributable to Biogen Inc..

5 Addition of interest expense on capitalized operating leases. See Details »

6 Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= hidden × 35% = hidden

7 Addition of after taxes interest expense to net income attributable to Biogen Inc..

8 Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= hidden × 35% = hidden

9 Elimination of after taxes investment income.

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. Biogen Inc.'s NOPAT increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

Cash Operating Taxes

Biogen Inc., cash operating taxes calculation

USD $ in thousands

Microsoft Excel LibreOffice Calc
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Income tax expense hidden hidden hidden hidden hidden
Less: Deferred income tax expense (benefit) hidden hidden hidden hidden hidden
Add: Tax savings from interest expense hidden hidden hidden hidden hidden
Less: Tax imposed on investment income hidden hidden hidden hidden hidden
Cash operating taxes hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

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. Biogen Inc.'s cash operating taxes increased from 2015 to 2016 and from 2016 to 2017.

Invested Capital

Biogen Inc., invested capital calculation (financing approach)

USD $ in thousands

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Current portion of notes payable and other financing arrangements hidden hidden hidden hidden hidden
Notes payable and other financing arrangements, excluding current portion hidden hidden hidden hidden hidden
PV of operating lease payments1 hidden hidden hidden hidden hidden
Total reported debt & leases hidden hidden hidden hidden hidden
Total Biogen Inc. shareholders' equity hidden hidden hidden hidden hidden
Net deferred tax (assets) liabilities2 hidden hidden hidden hidden hidden
Reserves for allowances3 hidden hidden hidden hidden hidden
Restructuring reserve4 hidden hidden hidden hidden hidden
Equity equivalents5 hidden hidden hidden hidden hidden
Accumulated other comprehensive (income) loss, net of tax6 hidden hidden hidden hidden hidden
Noncontrolling interests hidden hidden hidden hidden hidden
Adjusted total Biogen Inc. shareholders' equity hidden hidden hidden hidden hidden
Construction in progress7 hidden hidden hidden hidden hidden
Marketable securities8 hidden hidden hidden hidden hidden
Invested capital hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

1 Addition of capitalized operating leases. See Details »

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

3 Addition of allowance for doubtful accounts receivable.

4 Addition of restructuring reserve.

5 Addition of equity equivalents to total Biogen Inc. shareholders' equity.

6 Removal of accumulated other comprehensive income.

7 Subtraction of construction in progress.

8 Subtraction of marketable securities.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Biogen Inc.'s invested capital increased from 2015 to 2016 but then slightly declined from 2016 to 2017.

Cost of Capital

Biogen Inc., cost of capital calculations

Fair Value1 Weights Cost of Capital
Equity2 hidden hidden ÷ hidden = hidden hidden × hidden = hidden
Notes payable and other financing arrangements, including current portion3 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
PV of operating lease payments4 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01).

1 USD $ in thousands

2 Equity. See Details »

3 Notes payable and other financing arrangements, including current portion. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 hidden hidden ÷ hidden = hidden hidden × hidden = hidden
Notes payable and other financing arrangements, including current portion3 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
PV of operating lease payments4 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2017-02-02).

1 USD $ in thousands

2 Equity. See Details »

3 Notes payable and other financing arrangements, including current portion. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 hidden hidden ÷ hidden = hidden hidden × hidden = hidden
Notes payable and other financing arrangements, including current portion3 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
PV of operating lease payments4 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2016-02-03).

1 USD $ in thousands

2 Equity. See Details »

3 Notes payable and other financing arrangements, including current portion. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 hidden hidden ÷ hidden = hidden hidden × hidden = hidden
Notes payable and other financing arrangements, including current portion3 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
PV of operating lease payments4 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2015-02-04).

1 USD $ in thousands

2 Equity. See Details »

3 Notes payable and other financing arrangements, including current portion. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 hidden hidden ÷ hidden = hidden hidden × hidden = hidden
Notes payable and other financing arrangements, including current portion3 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
PV of operating lease payments4 hidden hidden ÷ hidden = hidden hidden × hidden × (1 – 35%) = hidden
Total: hidden hidden hidden

Based on: 10-K (filing date: 2014-02-06).

1 USD $ in thousands

2 Equity. See Details »

3 Notes payable and other financing arrangements, including current portion. See Details »

4 PV of operating lease payments. See Details »


Economic Spread

Biogen Inc., economic spread calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in thousands)
Economic profit1 hidden hidden hidden hidden hidden
Invested capital2 hidden hidden hidden hidden hidden
Ratio
Economic spread3 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

2017 Calculations

1 Economic profit. See Details »

2 Invested capital. See Details »

3 Economic spread = 100 × Economic profit ÷ Invested capital
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Economic spread The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Biogen Inc.'s economic spread deteriorated from 2015 to 2016 and from 2016 to 2017.

Economic Profit Margin

Biogen Inc., economic profit margin calculation

Microsoft Excel LibreOffice Calc
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in thousands)
Economic profit1 hidden hidden hidden hidden hidden
Revenues hidden hidden hidden hidden hidden
Ratio
Economic profit margin2 hidden hidden hidden hidden hidden

Based on: 10-K (filing date: 2018-02-01), 10-K (filing date: 2017-02-02), 10-K (filing date: 2016-02-03), 10-K (filing date: 2015-02-04), 10-K (filing date: 2014-02-06).

2017 Calculations

1 Economic profit. See Details »

2 Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × hidden ÷ hidden = hidden

Ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company's 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. Biogen Inc.'s economic profit margin deteriorated from 2015 to 2016 and from 2016 to 2017.