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
Broadcom Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-11-02), 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01).
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
= 23,367 – 18.52% × 150,047 = -4,414
The analysis of economic profit reveals a volatile trajectory characterized by an initial recovery period, a significant downturn following a capital expansion, and a subsequent partial recovery. The organization transitioned from destroying shareholder value in 2020 to creating economic value by 2022, before returning to a negative economic profit position in 2024 and 2025.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a strong upward trend from 2020 to 2023, growing from 3,151 million USD to 14,443 million USD. Although a decline occurred in 2024 to 11,082 million USD, a substantial surge is observed by November 2025, with profit reaching 23,367 million USD, indicating a significant increase in operational earning power.
- Cost of Capital
- The cost of capital demonstrated a consistent and steady increase throughout the analyzed period. Starting at 15.62% in 2020, the rate rose incrementally each year, peaking at 18.52% by November 2025. This upward trend increases the hurdle rate that the organization must overcome to generate positive economic value.
- Invested Capital
- Invested capital remained relatively stable between 2020 and 2023, fluctuating slightly around the 62,000 to 66,000 million USD range. However, a massive expansion is noted in 2024, where invested capital jumped to 141,001 million USD, and further increased to 150,047 million USD by 2025. This represents a more than twofold increase in the capital base over a short duration.
- Economic Profit Trends
- Economic profit was negative from 2020 to 2021, turning positive in 2022 and 2023 as NOPAT growth outpaced the capital charge. The trend reversed sharply in 2024, with economic profit falling to -14,608 million USD. This collapse is directly attributable to the surge in invested capital, which significantly increased the total cost of capital charge beyond the operational profits generated. While economic profit improved to -4,414 million USD by 2025 due to the spike in NOPAT, the organization has not yet returned to a state of positive economic value creation.
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Net Operating Profit after Taxes (NOPAT)
Broadcom Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-11-02), 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowances for doubtful accounts.
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
= 1,325 × 4.78% = 63
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 3,273 × 21.00% = 687
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
= 330 × 21.00% = 69
9 Elimination of after taxes investment income.
10 Elimination of discontinued operations.
- Net Income
- The net income exhibited a generally upward trend from 2020 through 2023, increasing from $2,960 million in 2020 to $14,082 million in 2023. However, there was a notable decline in 2024, where net income dropped substantially to $5,895 million. In 2025, net income rebounded markedly to $23,126 million, representing a strong recovery and the highest value in the observed period.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT values also showed a consistent upward trajectory from 2020 to 2023, rising from $3,151 million to $14,443 million. In 2024, a decrease to $11,082 million was observed, indicating a dip in operating profitability after taxes during this period. By 2025, NOPAT surged significantly to $23,367 million, surpassing previous highs and highlighting improved operational efficiency or profitability.
- Overall Trends and Insights
- Both key profitability metrics, net income and NOPAT, followed a similar pattern over the six-year period. Initial years saw strong growth, followed by a dip in 2024, and a strong recovery in 2025. The temporary decline in 2024 may suggest the presence of extraordinary expenses, market challenges, or operational issues that impacted performance. The recovery in 2025 to new highs implies effective corrective measures, improved market conditions, or successful business strategies implemented to restore and enhance profitability.
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Cash Operating Taxes
Broadcom Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-11-02), 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01).
- Provision for (benefit from) income taxes
- The provision for income taxes exhibited significant fluctuation over the analyzed periods. Initially, there was a notable tax benefit recorded, reflected by a negative value, indicating a tax gain of US$ 518 million. This shifted dramatically to a modest tax expense of US$ 29 million in the following year. Subsequently, the provision increased sharply, reaching US$ 939 million and further rising to US$ 1,015 million. A pronounced peak occurred in the year ending November 3, 2024, with a provision amounting to US$ 3,748 million. The latest period shows a reversal back to a tax benefit, with a negative provision of US$ 397 million. This volatility suggests a varying effective tax rate, possibly influenced by changes in pre-tax income, tax planning strategies, or one-time tax events.
- Cash operating taxes
- Cash operating taxes demonstrated a consistent upward trend across the reported periods. Starting from US$ 925 million, these taxes increased steadily each year, reaching US$ 1,402 million, then slightly declining to US$ 1,367 million before ascending again to US$ 1,745 million and then to US$ 2,534 million by the penultimate period. The most recent data point reveals a slight decrease to US$ 2,254 million. This trend indicates an overall growth in taxable income or changes in tax regulations leading to higher cash tax payments, despite some fluctuations.
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Invested Capital
Broadcom Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-11-02), 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01).
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.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
- Total Reported Debt & Leases
- The total reported debt and leases showed a slight decline from 41,689 million USD in 2020 to 39,648 million USD in 2023, indicating a modest reduction in liabilities during these years. However, a significant increase occurred in 2024, with debt rising sharply to 68,916 million USD, followed by a small decrease to 66,461 million USD in 2025. This pattern suggests a substantial increase in leverage starting in 2024.
- Stockholders’ Equity
- Stockholders' equity experienced fluctuations over the analyzed period. It increased modestly from 23,874 million USD in 2020 to 24,962 million USD in 2021, then decreased to 22,709 million USD in 2022. By 2023, equity recovered slightly to 23,988 million USD. A pronounced surge occurred in 2024, with equity nearly tripling to 67,678 million USD, followed by a further increase to 81,292 million USD in 2025. This trend implies strong growth in the company’s net worth during the last two years.
- Invested Capital
- Invested capital declined gradually from 65,949 million USD in 2020 to 62,674 million USD in 2023, reflecting a conservative capital base during these years. However, in 2024, invested capital surged dramatically to 141,001 million USD and continued to increase in 2025 to 150,047 million USD. The sharp rise aligns with increases in both debt and equity, pointing to substantial capital deployment or asset acquisition within the recent period.
- Overall Insights
- The data indicates a relatively stable financial position from 2020 through 2023, with minor variations in debt and equity levels. Beginning in 2024, there is a marked expansion in the balance sheet components, characterized by significant increases in debt, equity, and invested capital. This shift may be indicative of strategic investments, acquisitions, or capital raising activities executed in the latest reported years. The simultaneous rise in both liabilities and equity suggests that the company has leveraged multiple sources of financing to support its growth or operational objectives.
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Cost of Capital
Broadcom Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,564,051) | 1,564,051) | ÷ | 1,629,985) | = | 0.96 | 0.96 | × | 19.14% | = | 18.37% | ||
| 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value | —) | —) | ÷ | 1,629,985) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt3 | 64,609) | 64,609) | ÷ | 1,629,985) | = | 0.04 | 0.04 | × | 4.54% × (1 – 21.00%) | = | 0.14% | ||
| Operating lease liability4 | 1,325) | 1,325) | ÷ | 1,629,985) | = | 0.00 | 0.00 | × | 4.78% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 1,629,985) | 1.00 | 18.52% | ||||||||||
Based on: 10-K (reporting date: 2025-11-02).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,034,921) | 1,034,921) | ÷ | 1,101,293) | = | 0.94 | 0.94 | × | 19.14% | = | 17.99% | ||
| 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value | —) | —) | ÷ | 1,101,293) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt3 | 65,022) | 65,022) | ÷ | 1,101,293) | = | 0.06 | 0.06 | × | 4.80% × (1 – 21.00%) | = | 0.22% | ||
| Operating lease liability4 | 1,350) | 1,350) | ÷ | 1,101,293) | = | 0.00 | 0.00 | × | 5.31% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 1,101,293) | 1.00 | 18.22% | ||||||||||
Based on: 10-K (reporting date: 2024-11-03).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 517,998) | 517,998) | ÷ | 551,598) | = | 0.94 | 0.94 | × | 19.14% | = | 17.98% | ||
| 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value | —) | —) | ÷ | 551,598) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt3 | 33,181) | 33,181) | ÷ | 551,598) | = | 0.06 | 0.06 | × | 4.11% × (1 – 21.00%) | = | 0.20% | ||
| Operating lease liability4 | 419) | 419) | ÷ | 551,598) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 551,598) | 1.00 | 18.18% | ||||||||||
Based on: 10-K (reporting date: 2023-10-29).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 232,303) | 232,303) | ÷ | 265,780) | = | 0.87 | 0.87 | × | 19.14% | = | 16.73% | ||
| 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value | —) | —) | ÷ | 265,780) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt3 | 33,014) | 33,014) | ÷ | 265,780) | = | 0.12 | 0.12 | × | 4.10% × (1 – 21.00%) | = | 0.40% | ||
| Operating lease liability4 | 463) | 463) | ÷ | 265,780) | = | 0.00 | 0.00 | × | 3.60% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 265,780) | 1.00 | 17.14% | ||||||||||
Based on: 10-K (reporting date: 2022-10-30).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 262,175) | 262,175) | ÷ | 312,819) | = | 0.84 | 0.84 | × | 19.14% | = | 16.04% | ||
| 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value | 6,709) | 6,709) | ÷ | 312,819) | = | 0.02 | 0.02 | × | 4.77% | = | 0.10% | ||
| Debt3 | 43,392) | 43,392) | ÷ | 312,819) | = | 0.14 | 0.14 | × | 4.09% × (1 – 21.00%) | = | 0.45% | ||
| Operating lease liability4 | 543) | 543) | ÷ | 312,819) | = | 0.00 | 0.00 | × | 3.78% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 312,819) | 1.00 | 16.60% | ||||||||||
Based on: 10-K (reporting date: 2021-10-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 176,758) | 176,758) | ÷ | 227,419) | = | 0.78 | 0.78 | × | 19.14% | = | 14.88% | ||
| 8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value | 4,760) | 4,760) | ÷ | 227,419) | = | 0.02 | 0.02 | × | 6.72% | = | 0.14% | ||
| Debt3 | 45,274) | 45,274) | ÷ | 227,419) | = | 0.20 | 0.20 | × | 3.79% × (1 – 21.00%) | = | 0.60% | ||
| Operating lease liability4 | 627) | 627) | ÷ | 227,419) | = | 0.00 | 0.00 | × | 3.80% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 227,419) | 1.00 | 15.62% | ||||||||||
Based on: 10-K (reporting date: 2020-11-01).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Broadcom Inc., economic spread ratio calculation, comparison to benchmarks
| Nov 2, 2025 | Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (4,414) | (14,608) | 3,051) | 2,245) | (3,635) | (7,153) | |
| Invested capital2 | 150,047) | 141,001) | 62,674) | 62,112) | 64,651) | 65,949) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -2.94% | -10.36% | 4.87% | 3.61% | -5.62% | -10.85% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.11% | -27.37% | -28.80% | -28.42% | 28.16% | — | |
| Analog Devices Inc. | -12.03% | -14.15% | -10.06% | -11.43% | -14.67% | -9.61% | |
| Applied Materials Inc. | 17.27% | 10.37% | 13.36% | 23.33% | 18.82% | 7.16% | |
| Intel Corp. | -18.62% | -29.96% | -19.83% | -13.05% | 3.54% | — | |
| KLA Corp. | 20.58% | 16.23% | 20.17% | 22.57% | 11.03% | — | |
| Lam Research Corp. | 12.15% | -2.98% | 2.38% | 17.40% | 12.74% | — | |
| Marvell Technology Inc. | -26.42% | -26.46% | -22.13% | -24.89% | -26.61% | — | |
| Micron Technology Inc. | -14.47% | -26.19% | -37.98% | -10.44% | -15.17% | — | |
| NVIDIA Corp. | 117.48% | 62.03% | -16.05% | 26.14% | 6.62% | — | |
| Qualcomm Inc. | 12.49% | 7.70% | 0.23% | 26.66% | 24.06% | 9.13% | |
| Texas Instruments Inc. | 2.39% | 2.70% | 12.32% | 32.90% | 31.54% | — | |
Based on: 10-K (reporting date: 2025-11-02), 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -4,414 ÷ 150,047 = -2.94%
4 Click competitor name to see calculations.
The financial trajectory from 2020 to 2025 exhibits a period of steady value recovery followed by a significant capital expansion that temporarily eroded economic value before beginning a subsequent recovery phase.
- Economic Profit
- A positive trend is observed between 2020 and 2023, as economic profit transitioned from a loss of 7,153 million USD to a surplus of 3,051 million USD. This period of value creation was interrupted in 2024 by a substantial deficit of 14,608 million USD. By 2025, a narrowing of this loss to 4,414 million USD suggests a trend toward returning to profitability.
- Invested Capital
- Invested capital remained relatively stable from 2020 through 2023, fluctuating within a narrow range between 62,112 million USD and 65,949 million USD. A significant escalation occurred in 2024, with invested capital increasing to 141,001 million USD, and further rising to 150,047 million USD in 2025. This indicates a massive expansion of the asset base during this period.
- Economic Spread Ratio
- The economic spread ratio showed consistent improvement from 2020 to 2023, rising from -10.85% to a peak of 4.87%. The sharp increase in invested capital in 2024 coincided with a steep decline in the ratio to -10.36%, indicating that the returns on the expanded capital base were initially insufficient to cover the cost of capital. However, the ratio improved to -2.94% in 2025, reflecting a recovery in the spread and a reduction in the rate of value destruction.
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Economic Profit Margin
Broadcom Inc., economic profit margin calculation, comparison to benchmarks
| Nov 2, 2025 | Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (4,414) | (14,608) | 3,051) | 2,245) | (3,635) | (7,153) | |
| Net revenue | 63,887) | 51,574) | 35,819) | 33,203) | 27,450) | 23,888) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -6.91% | -28.32% | 8.52% | 6.76% | -13.24% | -29.94% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -37.61% | -61.81% | -73.50% | -70.47% | 10.61% | — | |
| Analog Devices Inc. | -45.93% | -65.34% | -36.13% | -42.83% | -94.24% | -31.23% | |
| Applied Materials Inc. | 12.25% | 7.22% | 8.96% | 13.47% | 12.01% | 5.45% | |
| Intel Corp. | -41.07% | -52.08% | -33.68% | -18.36% | 3.97% | — | |
| KLA Corp. | 15.74% | 13.93% | 16.02% | 19.08% | 10.87% | — | |
| Lam Research Corp. | 10.15% | -3.02% | 2.09% | 12.85% | 10.28% | — | |
| Marvell Technology Inc. | -81.64% | -91.49% | -74.77% | -111.07% | -81.68% | — | |
| Micron Technology Inc. | -23.39% | -54.91% | -129.04% | -17.68% | -25.06% | — | |
| NVIDIA Corp. | 42.55% | 31.32% | -12.70% | 17.52% | 5.17% | — | |
| Qualcomm Inc. | 8.83% | 6.10% | 0.20% | 17.76% | 14.49% | 6.89% | |
| Texas Instruments Inc. | 3.86% | 4.52% | 15.89% | 28.85% | 28.21% | — | |
Based on: 10-K (reporting date: 2025-11-02), 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenue
= 100 × -4,414 ÷ 63,887 = -6.91%
3 Click competitor name to see calculations.
The financial trajectory from 2020 through 2025 exhibits a stark contrast between consistent top-line growth and volatile economic performance. While net revenue demonstrates a steady upward trend, economic profit and the corresponding margin show significant instability, transitioning through phases of value destruction and value creation.
- Net Revenue Growth
- A consistent and substantial increase in net revenue is observed over the analyzed period. Revenue rose from 23,888 million US dollars in 2020 to a projected 63,887 million US dollars by 2025, indicating strong market expansion and growth in sales volume.
- Economic Profit Volatility
- Economic profit followed a non-linear path. After starting at -7,153 million US dollars in 2020, it improved annually to reach a peak of 3,051 million US dollars in 2023. This positive trend was sharply reversed in 2024, with economic profit falling to -14,608 million US dollars, before shifting toward a partial recovery of -4,414 million US dollars in 2025.
- Economic Profit Margin Analysis
- The economic profit margin reflects the same volatility as the absolute economic profit. The margin improved from -29.94% in 2020 to a peak of 8.52% in 2023, signaling a period where the company generated returns above its cost of capital. However, the margin collapsed to -28.32% in 2024, suggesting a significant misalignment between the capital employed and the resulting economic gain. A projected improvement to -6.91% in 2025 indicates a continuing trend toward recovery, although the company remains in a state of economic value destruction.
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