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
Expand Energy Corp. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Expand Energy Corp. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Expand Energy Corp., economic profit calculation
US$ in millions
| 12 months ended: | 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: 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 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial trajectory from 2021 to 2024 reveals a severe deterioration in economic value creation, characterized by a transition from substantial economic profit to a significant economic loss.
- Net Operating Profit After Taxes (NOPAT)
- A consistent and accelerating downward trend is observed in NOPAT, which fell from US$ 6,263 million in 2021 to US$ 2,933 million in 2023, eventually turning negative at -US$ 723 million in 2024. This indicates a substantial decline in operational efficiency and profitability over the period.
- Invested Capital
- Invested capital experienced steady growth between 2021 and 2023, rising from US$ 7,990 million to US$ 11,924 million. A sharp increase occurred in 2024, with the capital base nearly doubling to US$ 22,822 million, suggesting a period of aggressive expansion or significant capital acquisition.
- Cost of Capital
- The cost of capital remained relatively stable, fluctuating within a narrow range between 9.89% and 10.30%. The minor decrease to 9.96% in 2024 indicates that the decline in economic performance was not driven by an increase in the cost of funding, but rather by operational and capital structure changes.
- Economic Profit
- Economic profit declined steeply from US$ 5,472 million in 2021 to US$ 1,705 million in 2023, before collapsing to -US$ 2,997 million in 2024. The shift into negative territory signifies that the company is no longer generating returns sufficient to cover its cost of capital, resulting in the destruction of economic value.
The simultaneous collapse of operating profits and the rapid expansion of the invested capital base created a critical divergence in 2024. The resulting negative economic profit reflects an inability to translate increased capital investment into operating returns, leading to a significant erosion of shareholder value.
Net Operating Profit after Taxes (NOPAT)
Expand Energy Corp., NOPAT calculation
US$ in millions
Based on: 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 doubtful accounts.
3 Addition of increase (decrease) in equity equivalents to net income (loss).
4 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income (loss).
The financial data reveals a downward trend in the profitability indicators over the four-year period.
- Net Income (Loss)
- The net income shows a consistent decline from US$ 6,328 million at the end of 2021 to US$ -714 million by the end of 2024. This represents a significant deterioration in profitability, moving from a strong positive net income to a negative result, indicating losses in the latest period.
- Net Operating Profit After Taxes (NOPAT)
- Similarly, NOPAT also declines steadily from US$ 6,263 million in 2021 to US$ -723 million in 2024. The trend mirrors net income, demonstrating a substantial decrease in operational profitability after accounting for taxes. The transition into negative territory further highlights operational difficulties by the end of the period.
Overall, both key profit metrics exhibit a marked deterioration, signaling challenges in maintaining profitability and operational effectiveness over the time span analyzed. The consistent yearly declines suggest possible adverse factors influencing earnings and operations, culminating in losses by the fourth year.
Cash Operating Taxes
Expand Energy Corp., cash operating taxes calculation
US$ in millions
Based on: 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 (Benefit)
- The income tax expense shows significant volatility over the analyzed periods. Initially, there is a benefit recorded in 2021 with a negative value of -106 million USD, which sharply increases in magnitude to -1285 million USD in 2022, indicating a substantial tax benefit or credit during that year. However, this trend reverses in 2023, where the figure shifts to a positive tax expense of 698 million USD, suggesting a considerable tax liability incurred that year. In 2024, the amount again reverses to a tax benefit of -127 million USD, though less pronounced than in 2022. This pattern reflects substantial fluctuations in taxable income, tax adjustments, or changes in tax policy affecting the company’s tax position annually.
- Cash Operating Taxes
- The cash operating taxes demonstrate a generally rising trend from 2021 to 2023, starting at 18 million USD in 2021 and increasing to 82 million USD in 2022, then reaching a peak at 293 million USD in 2023. This steady increase may indicate growing profitability or changes in tax payments related to operating activities. However, in 2024, there is a sharp decline to 24 million USD, which could reflect a reduction in taxable income, tax credits applied, or operational changes affecting tax payments. Overall, the cash tax payments show a pattern of growth followed by a significant drop.
Invested Capital
Expand Energy Corp., invested capital calculation (financing approach)
US$ in millions
Based on: 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 equity equivalents to stockholders’ equity.
5 Removal of accumulated other comprehensive income.
The financial data for the four-year period reveals notable fluctuations and significant growth in the company's capital structure components.
- Total Reported Debt & Leases
- This item shows considerable variability. Initially, debt increased substantially from 2,316 million USD at the end of 2021 to 3,212 million USD in 2022. Subsequently, it decreased to 2,127 million USD in 2023 before surging dramatically to 5,825 million USD by the end of 2024. The sharp rise in 2024 represents a notable increase, more than doubling the 2023 figure, which may indicate aggressive financing or capital expenditure efforts during that year.
- Stockholders’ Equity
- Equity displays a consistent upward trajectory across the four years. Starting at 5,671 million USD in 2021, it rose to 9,124 million USD in 2022, further to 10,729 million USD in 2023, and reached 17,565 million USD in 2024. This steady increase suggests ongoing profitability, retained earnings growth, or equity financing activities contributing to a strengthening balance sheet position.
- Invested Capital
- Invested capital also shows an upward trend, increasing from 7,990 million USD in 2021 to 10,988 million USD in 2022, then to 11,924 million USD in 2023, and substantially rising to 22,822 million USD in 2024. The steep increase in 2024 aligns with the spike in total debt and equity, indicating expanded asset investment or acquisitions funded by a combination of debt and equity.
Overall, the company has significantly expanded its financial base over the period, with substantial increases in both equity and debt, particularly evident in 2024. The growth in invested capital aligns with these financing changes, suggesting intensified investment activity. The pattern of debt fluctuations coupled with steady equity growth implies a strategic approach to capital structure management, balancing debt leverage with equity enhancement.
Cost of Capital
Expand Energy Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Expand Energy Corp., economic spread ratio calculation, comparison to benchmarks
| 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 | |||||
| Chevron Corp. | |||||
| ConocoPhillips | |||||
| Exxon Mobil Corp. | |||||
Based on: 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 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data from 2021 through 2024 indicates a severe deterioration in economic value creation, characterized by a transition from significant value addition to value destruction. A consistent downward trajectory is observed in both economic profit and the economic spread ratio, occurring simultaneously with a substantial increase in the capital base.
- Economic Profit Trend
- A sharp and continuous decline in economic profit is evident. From a peak of US$ 5,472 million in 2021, the figure decreased to US$ 2,634 million in 2022 and further to US$ 1,705 million in 2023. By December 31, 2024, the economic profit transitioned into a deficit of US$ 2,997 million, signaling that the company is no longer generating returns above its cost of capital.
- Invested Capital Expansion
- Invested capital grew steadily over the analyzed period, rising from US$ 7,990 million in 2021 to US$ 11,924 million in 2023. A significant acceleration in capital deployment occurred in 2024, where invested capital surged to US$ 22,822 million. This represents a near-doubling of the capital base within a single year.
- Economic Spread Ratio Analysis
- The economic spread ratio, which measures the excess return over the cost of capital, collapsed from 68.49% in 2021 to 14.30% in 2023. The ratio turned negative in 2024, reaching -13.13%. This trend confirms that the returns generated by the company's assets have fallen below the required minimum rate of return.
The convergence of these trends suggests a critical misalignment between capital expenditure and value generation. The massive increase in invested capital in 2024 coincides with the shift to negative economic profit and a negative spread ratio, indicating that the most recent capital investments have not yet produced positive economic returns and are currently eroding shareholder value.
Economic Profit Margin
Expand Energy Corp., economic profit margin calculation, comparison to benchmarks
| 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 | |||||
| Chevron Corp. | |||||
| ConocoPhillips | |||||
| Exxon Mobil Corp. | |||||
Based on: 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 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial performance of Expand Energy Corp. demonstrates a significant deterioration in value creation over the four-year period ending December 31, 2024. The company transitioned from a position of substantial economic value addition to a state of economic value destruction, characterized by a collapse in both absolute economic profit and the corresponding profit margin.
- Economic Profit Trend
- A consistent downward trajectory is observed in economic profit, which declined from US$ 5,472 million in 2021 to a deficit of US$ 2,997 million by the end of 2024. While the decline was gradual between 2022 and 2023, the transition into negative territory in 2024 indicates that the company's net operating profit after taxes no longer covers its cost of capital.
- Revenue Volatility
- Revenues exhibited extreme volatility, peaking in 2022 at US$ 14,123 million before contracting sharply to US$ 4,259 million in 2024. The inability to maintain the revenue levels achieved in 2022 coincides with the erosion of economic profit, suggesting a failure to sustain operational scale or pricing power.
- Economic Profit Margin Analysis
- The economic profit margin experienced a severe contraction, falling from a peak of 74.95% in 2021 to -70.36% in 2024. Although a marginal recovery to 28.20% occurred in 2023, this was not sustained. The negative margin in 2024 reflects a critical misalignment between the company's revenue generation and its capital charges, resulting in a substantial loss of economic value relative to its total sales.