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.
Paying user area
Try for free
Booking Holdings Inc. pages available for free this week:
- Income Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Booking Holdings Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Booking Holdings Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
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
= – × =
The financial performance from 2021 to 2025 is characterized by a significant transition from value destruction to substantial value creation. A consistent upward trajectory in profitability, coupled with optimized capital management, has resulted in a stark improvement in economic profit over the analyzed period.
- Economic Profit and NOPAT Trends
- A pivot from a negative economic profit of US$ -2,043 million in 2021 to a peak of US$ 3,781 million in 2024 indicates a strong recovery and growth phase. This turnaround is primarily driven by the rapid expansion of Net Operating Profit After Taxes (NOPAT), which grew from US$ 671 million in 2021 to US$ 6,151 million in 2024. Although a slight contraction in NOPAT and economic profit occurred in 2025, the figures remain significantly higher than pre-2022 levels, suggesting a sustained ability to generate returns above the cost of capital.
- Cost of Capital Stability
- The cost of capital remained remarkably stable throughout the five-year period, fluctuating within a narrow range between 17.90% and 18.27%. This stability implies that the volatility in economic profit was not caused by changes in the required rate of return or market risk premiums, but was instead a direct result of operational performance and capital efficiency.
- Invested Capital Efficiency
- A notable downward trend in invested capital was observed between 2021 and 2023, decreasing from US$ 15,004 million to US$ 11,415 million. The simultaneous increase in NOPAT during this decline in invested capital indicates a significant improvement in capital productivity. While invested capital rose slightly in 2024 and stabilized in 2025 at approximately US$ 12,912 million, the overall efficiency of the capital employed remained high enough to support positive economic profit.
- Value Creation Synthesis
- The convergence of increasing operational profits and a stabilized cost of capital has transformed the company's economic profile. The shift from 2021, where the cost of capital exceeded NOPAT, to 2024, where the spread between operating profit and the capital charge reached its maximum, demonstrates a period of aggressive value enhancement.
Net Operating Profit after Taxes (NOPAT)
Booking Holdings Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for expected credit losses.
3 Addition of increase (decrease) in restructuring liabilities.
4 Addition of increase (decrease) in equity equivalents to net income.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
Net operating profit after taxes (NOPAT) demonstrates a significant upward trend over the observed period, though with a recent moderation. Initial values are substantially lower than subsequent years, indicating a period of growth. While net income also increased, the growth rate of NOPAT appears more pronounced in the earlier part of the period.
- Overall Trend
- NOPAT experienced substantial growth from 2021 to 2024. The value increased from US$671 million in 2021 to US$6,151 million in 2024, representing a considerable expansion. However, growth slowed in 2025, with NOPAT decreasing to US$5,449 million.
- Growth Rates
- The period between 2021 and 2022 saw a substantial increase in NOPAT. The growth rate decelerated between 2022 and 2023, but remained positive. The most significant growth occurred between 2023 and 2024. The decline in NOPAT between 2024 and 2025 warrants further investigation.
- Relationship to Net Income
- Both net income and NOPAT increased over the period. However, the magnitude of the increase in NOPAT was greater than that of net income in the initial years, suggesting changes in the company’s operating efficiency or capital structure. The difference in growth rates between the two metrics narrowed in 2025, coinciding with the decrease in NOPAT.
- Recent Performance
- The decrease in NOPAT from 2024 to 2025 is a notable development. While net income also decreased, the relative decline in NOPAT suggests potential issues with operational profitability or increased costs not fully reflected in net income. This recent trend breaks the previously established pattern of consistent growth.
Cash Operating Taxes
Booking Holdings Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Income tax expense and cash operating taxes both demonstrate increasing values over the observed period. However, the magnitude and pattern of change differ between the two metrics.
- Income Tax Expense
- Income tax expense increased from US$300 million in 2021 to US$1,428 million in 2025. The most substantial increase occurred between 2021 and 2022, rising by US$565 million. Growth moderated in subsequent years, with increases of US$327 million (2022-2023), US$218 million (2023-2024), and US$18 million (2024-2025). This suggests a decelerating rate of growth in reported income tax expense.
- Cash Operating Taxes
- Cash operating taxes also exhibited an upward trend, moving from US$758 million in 2021 to US$2,096 million in 2025. Similar to income tax expense, the largest increase was observed between 2021 and 2022, with a rise of US$404 million. A significant increase of US$488 million occurred between 2022 and 2023. The rate of increase slowed in 2024, with a decrease of US$105 million, before resuming growth with an increase of US$741 million in 2025. This pattern indicates potential fluctuations influenced by factors beyond simple proportional growth.
- Relationship between Metrics
- Cash operating taxes consistently exceeded income tax expense throughout the period. The difference between the two metrics varied annually. In 2021, cash operating taxes were approximately 2.5 times income tax expense (US$758 million vs. US$300 million). This ratio decreased over time, reaching approximately 1.47 times in 2025 (US$2,096 million vs. US$1,428 million). This narrowing gap suggests a potential shift in the timing of tax payments relative to reported income, or changes in non-cash tax items.
The observed trends suggest increasing tax obligations for the entity. The divergence in growth rates and the relationship between income tax expense and cash operating taxes warrant further investigation to understand the underlying drivers and potential implications for future financial performance.
Invested Capital
Booking Holdings Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of restructuring liabilities.
5 Addition of equity equivalents to stockholders’ equity (deficit).
6 Removal of accumulated other comprehensive income.
7 Subtraction of building construction-in-progress.
8 Subtraction of marketable securities.
The composition of invested capital exhibits notable shifts over the five-year period. Total reported debt & leases consistently increased, while stockholders’ equity experienced a significant decline, ultimately resulting in a deficit by the end of 2023. Despite these underlying changes, invested capital itself demonstrates a more moderate fluctuation.
- Debt & Leases
- Total reported debt & leases increased steadily from US$11,430 million in 2021 to US$19,414 million in 2025. This represents a cumulative increase of approximately 70% over the period. The rate of increase appears relatively consistent year-over-year.
- Stockholders’ Equity
- Stockholders’ equity decreased substantially from US$6,178 million in 2021 to a deficit of US$5,578 million in 2025. The decline was particularly pronounced between 2022 and 2023, transitioning from a positive equity position to a negative one. This negative trend continued through 2024 and 2025, with the deficit widening each year.
- Invested Capital
- Invested capital decreased from US$15,004 million in 2021 to US$11,415 million in 2023, a decline of approximately 24%. It then showed a modest recovery, increasing to US$12,973 million in 2024 and remaining relatively stable at US$12,912 million in 2025. The fluctuations in invested capital appear to be influenced by the offsetting movements in debt and equity, but are less dramatic than the changes observed in either component individually.
The increasing reliance on debt financing, coupled with the erosion of stockholders’ equity, suggests a shift in the company’s capital structure. While invested capital has not mirrored the full extent of the equity decline, the trend warrants further investigation to understand the implications for financial risk and future performance.
Cost of Capital
Booking Holdings Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Booking Holdings Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial performance demonstrates a significant transition from economic value destruction to substantial value creation over the observed five-year period. A reversal in profitability is evident, as the entity moved from a negative economic profit position to a sustained period of positive value generation, peaking in 2024.
- Economic Profit Trends
- A sharp recovery is observed starting after 2021, where an economic loss of 2,043 million US dollars shifted to a profit of 523 million US dollars in 2022. This upward trajectory accelerated through 2024, reaching a maximum of 3,781 million US dollars, before experiencing a moderate contraction to 3,135 million US dollars in 2025. This pattern indicates a strong recovery in the ability to generate returns exceeding the cost of capital.
- Invested Capital Dynamics
- Invested capital exhibited a declining trend during the first three years, decreasing from 15,004 million US dollars in 2021 to a low of 11,415 million US dollars in 2023. A subsequent increase occurred in 2024 to 12,973 million US dollars, followed by relative stabilization at 12,912 million US dollars in 2025. The initial reduction in capital coincided with the initial phase of profit recovery, suggesting improved capital efficiency.
- Economic Spread Ratio Analysis
- The economic spread ratio reflects a volatile but generally positive trajectory. The ratio moved from a deficit of -13.61% in 2021 to a peak of 29.14% in 2024, signaling a widening gap between the return on invested capital and the weighted average cost of capital. Although the ratio declined to 24.28% in 2025, it remains significantly higher than the baseline levels seen at the start of the period, confirming a sustained improvement in economic efficiency.
Overall, the correlation between the reduction in invested capital and the surge in the economic spread ratio suggests that the organization successfully optimized its asset base to drive higher economic returns. The peak in 2024 represents the height of this efficiency, while the 2025 figures indicate a slight normalization of these gains.
Economic Profit Margin
Booking Holdings Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Airbnb Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 is characterized by a significant transition from economic value destruction to substantial value creation, occurring alongside a consistent expansion in top-line revenue.
- Revenue Growth Patterns
- A sustained upward trend in revenues is observed throughout the period, increasing from 10,958 million US$ in 2021 to 26,917 million US$ by 2025. This represents a steady growth phase, providing the necessary scale for the subsequent recovery in economic profit.
- Economic Profit Transition
- The company experienced a sharp reversal in economic profit, moving from a deficit of 2,043 million US$ in 2021 to a positive 523 million US$ in 2022. This positive momentum accelerated through 2024, reaching a peak of 3,781 million US$, before experiencing a moderate decline to 3,135 million US$ in 2025.
- Economic Profit Margin Dynamics
- The economic profit margin mirrors the absolute profit trend, shifting from a deeply negative 18.64% in 2021 to a high of 15.93% in 2024. While the margin expanded rapidly between 2021 and 2024, a contraction to 11.65% is noted in 2025. Because this margin decline occurred despite continued revenue growth, it suggests that the capital charges or operational costs increased at a rate exceeding the growth in economic profit during the final year.