Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Comcast Corp. (NASDAQ:CMCSA)

Economic Value Added (EVA)

Advanced level

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

Comcast Corp., economic profit calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net operating profit after taxes (NOPAT)1 17,733  15,940  14,808  12,341  11,649 
Cost of capital2 8.71% 8.32% 9.52% 9.56% 9.46%
Invested capital3 217,322  216,534  162,175  155,853  145,651 
 
Economic profit4 (1,190) (2,065) (628) (2,555) (2,124)

Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 17,7338.71% × 217,322 = -1,190

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. Comcast Corp.’s economic profit decreased from 2017 to 2018 but then increased from 2018 to 2019 not reaching 2017 level.

Net Operating Profit after Taxes (NOPAT)

Comcast Corp., NOPAT calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income attributable to Comcast Corporation 13,057  11,731  22,714  8,695  8,163 
Deferred income tax expense (benefit)1 563  290  (10,655) 1,444  958 
Increase (decrease) in allowance for doubtful accounts2 67  64  38  24  21 
Increase (decrease) in deferred revenue3 554  648  420  (170) 387 
Increase (decrease) in equity equivalents4 1,184  1,002  (10,197) 1,298  1,366 
Interest expense 4,567  3,542  3,086  2,942  2,702 
Interest expense, operating lease liability5 172  165  135  143  128 
Adjusted interest expense 4,739  3,707  3,221  3,085  2,830 
Tax benefit of interest expense6 (995) (779) (1,127) (1,080) (991)
Adjusted interest expense, after taxes7 3,744  2,929  2,093  2,006  1,840 
(Gain) loss on marketable securities (656) 187  17  (12) 47 
Investment income, before taxes (656) 187  17  (12) 47 
Tax expense (benefit) of investment income8 138  (39) (6) (16)
Investment income, after taxes9 (518) 148  11  (8) 31 
Net income (loss) attributable to noncontrolling interest 266  131  186  350  250 
Net operating profit after taxes (NOPAT) 17,733  15,940  14,808  12,341  11,649 

Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for doubtful accounts.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in equity equivalents to net income attributable to Comcast Corporation.

5 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 4,606 × 3.74% = 172

6 2019 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 4,739 × 21.00% = 995

7 Addition of after taxes interest expense to net income attributable to Comcast Corporation.

8 2019 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 656 × 21.00% = 138

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. Comcast Corp.’s NOPAT increased from 2017 to 2018 and from 2018 to 2019.

Cash Operating Taxes

Comcast Corp., cash operating taxes calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Income tax expense (benefit) 3,673  3,380  (7,578) 5,308  4,959 
Less: Deferred income tax expense (benefit) 563  290  (10,655) 1,444  958 
Add: Tax savings from interest expense 995  779  1,127  1,080  991 
Less: Tax imposed on investment income 138  (39) (6) (16)
Cash operating taxes 3,967  3,908  4,210  4,940  5,008 

Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05).

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. Comcast Corp.’s cash operating taxes decreased from 2017 to 2018 but then slightly increased from 2018 to 2019.

Invested Capital

Comcast Corp., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Current portion of long-term debt 4,452  4,398  5,134  5,480  3,627 
Long-term debt, less current portion 97,765  107,345  59,422  55,566  48,994 
Operating lease liability1 4,606  4,384  3,335  3,189  2,730 
Total reported debt & leases 106,823  116,127  67,891  64,235  55,351 
Total Comcast Corporation shareholders’ equity 82,726  71,613  68,606  53,943  52,269 
Net deferred tax (assets) liabilities2 28,093  26,369  24,202  34,813  33,566 
Allowance for doubtful accounts3 419  352  288  250  226 
Deferred revenue4 3,386  2,832  1,552  1,132  1,302 
Equity equivalents5 31,898  29,553  26,042  36,195  35,094 
Accumulated other comprehensive (income) loss, net of tax6 (1,047) 368  (379) (98) 174 
Redeemable noncontrolling interests and redeemable subsidiary preferred stock 1,372  1,316  1,357  1,446  1,221 
Noncontrolling interests 1,148  889  843  2,231  1,709 
Adjusted total Comcast Corporation shareholders’ equity 116,097  103,739  96,469  93,717  90,467 
Construction in process7 (5,245) (2,991) (1,752) (1,901) — 
Marketable equity securities8 (353) (341) (433) (198) (167)
Invested capital 217,322  216,534  162,175  155,853  145,651 

Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05).

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 deferred revenue.

5 Addition of equity equivalents to total Comcast Corporation shareholders’ equity.

6 Removal of accumulated other comprehensive income.

7 Subtraction of construction in process.

8 Subtraction of marketable equity 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. Comcast Corp.’s invested capital increased from 2017 to 2018 and from 2018 to 2019.

Cost of Capital

Comcast Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 200,971  200,971  ÷ 321,377  = 0.63 0.63 × 12.14% = 7.59%
Debt3 115,800  115,800  ÷ 321,377  = 0.36 0.36 × 3.78% × (1 – 21.00%) = 1.08%
Operating lease liability4 4,606  4,606  ÷ 321,377  = 0.01 0.01 × 3.74% × (1 – 21.00%) = 0.04%
Total: 321,377  1.00 8.71%

Based on: 10-K (filing date: 2020-01-30).

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 165,514  165,514  ÷ 283,998  = 0.58 0.58 × 12.14% = 7.07%
Debt3 114,100  114,100  ÷ 283,998  = 0.40 0.40 × 3.77% × (1 – 21.00%) = 1.20%
Operating lease liability4 4,384  4,384  ÷ 283,998  = 0.02 0.02 × 3.77% × (1 – 21.00%) = 0.05%
Total: 283,998  1.00 8.32%

Based on: 10-K (filing date: 2019-01-31).

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 197,531  197,531  ÷ 272,566  = 0.72 0.72 × 12.14% = 8.79%
Debt3 71,700  71,700  ÷ 272,566  = 0.26 0.26 × 4.04% × (1 – 35.00%) = 0.69%
Operating lease liability4 3,335  3,335  ÷ 272,566  = 0.01 0.01 × 4.04% × (1 – 35.00%) = 0.03%
Total: 272,566  1.00 9.52%

Based on: 10-K (filing date: 2018-01-31).

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 178,803  178,803  ÷ 248,292  = 0.72 0.72 × 12.14% = 8.74%
Debt3 66,300  66,300  ÷ 248,292  = 0.27 0.27 × 4.50% × (1 – 35.00%) = 0.78%
Operating lease liability4 3,189  3,189  ÷ 248,292  = 0.01 0.01 × 4.50% × (1 – 35.00%) = 0.04%
Total: 248,292  1.00 9.56%

Based on: 10-K (filing date: 2017-02-03).

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 145,127  145,127  ÷ 205,857  = 0.70 0.70 × 12.14% = 8.56%
Debt3 58,000  58,000  ÷ 205,857  = 0.28 0.28 × 4.70% × (1 – 35.00%) = 0.86%
Operating lease liability4 2,730  2,730  ÷ 205,857  = 0.01 0.01 × 4.70% × (1 – 35.00%) = 0.04%
Total: 205,857  1.00 9.46%

Based on: 10-K (filing date: 2016-02-05).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Comcast Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Economic profit1 (1,190) (2,065) (628) (2,555) (2,124)
Invested capital2 217,322  216,534  162,175  155,853  145,651 
Performance Ratio
Economic spread ratio3 -0.55% -0.95% -0.39% -1.64% -1.46%
Benchmarks
Economic Spread Ratio, Competitors4
Charter Communications Inc. -5.66% -5.89% -7.05% -7.30% -5.47%
Netflix Inc. -5.23% -6.30% -9.71% -10.62% -10.99%
Walt Disney Co. -1.20% 4.14% 2.10% 4.27% 2.02%

Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05).

1 Economic profit. See details »

2 Invested capital. See details »

3 2019 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,190 ÷ 217,322 = -0.55%

4 Click competitor name to see calculations.

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. Comcast Corp.’s economic spread ratio deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.

Economic Profit Margin

Comcast Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Economic profit1 (1,190) (2,065) (628) (2,555) (2,124)
 
Revenue 108,942  94,507  84,526  80,403  74,510 
Add: Increase (decrease) in deferred revenue 554  648  420  (170) 387 
Adjusted revenue 109,496  95,155  84,946  80,233  74,897 
Performance Ratio
Economic profit margin2 -1.09% -2.17% -0.74% -3.18% -2.84%
Benchmarks
Economic Profit Margin, Competitors3
Charter Communications Inc. -17.02% -18.38% -23.22% -35.10% -21.04%
Netflix Inc. -6.22% -6.75% -8.86% -7.64% -7.51%
Walt Disney Co. -2.88% 5.53% 3.03% 5.73% 2.61%

Based on: 10-K (filing date: 2020-01-30), 10-K (filing date: 2019-01-31), 10-K (filing date: 2018-01-31), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-05).

1 Economic profit. See details »

2 2019 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × -1,190 ÷ 109,496 = -1.09%

3 Click competitor name to see calculations.

Performance 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. Comcast Corp.’s economic profit margin deteriorated from 2017 to 2018 but then improved from 2018 to 2019 not reaching 2017 level.