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.
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- Income Statement
- Common-Size Income Statement
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2021
- Return on Equity (ROE) since 2021
- Price to Earnings (P/E) since 2021
- Price to Operating Profit (P/OP) since 2021
- Price to Book Value (P/BV) since 2021
- Analysis of Debt
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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 performance over the observed periods reveals several notable trends and shifts in the company's profitability and capital utilization.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrated a marked decline from 6,263 million US dollars in 2021 to 3,737 million in 2022, continuing its downward trajectory to 2,933 million in 2023. By 2024, it turned negative, reaching -723 million US dollars. This indicates diminishing operational profitability, culminating in an operational loss at the end of the period.
- Cost of Capital
- The cost of capital exhibited a slight upward trend initially, moving from 8.85% in 2021 to 9.17% in 2023, before decreasing slightly to 8.88% in 2024. Despite minor fluctuations, the cost of capital remained within a relatively narrow range around 9%, suggesting stable financing costs throughout the periods.
- Invested Capital
- Invested capital increased steadily and significantly across the years. Starting at 7,990 million US dollars in 2021, it rose to 10,988 million in 2022, then to 11,924 million in 2023, before experiencing a substantial jump to 22,822 million in 2024. This sharp increase in 2024 indicates a major expansion of asset base or capital investments.
- Economic Profit
- Economic profit, which reflects value creation after accounting for the cost of capital, declined consistently from 5,556 million US dollars in 2021 to 2,749 million in 2022, and further down to 1,839 million in 2023. By 2024, it turned negative, dropping to -2,750 million US dollars. This negative economic profit suggests the company did not generate sufficient returns to cover its cost of capital during the last reported period, implying value destruction.
Overall, the company faces challenges of declining profitability and value creation despite increased invested capital. The rise in invested capital, especially the pronounced increase in 2024, has not translated into proportional profitability, as evidenced by negative NOPAT and economic profit in that year. The stability of the cost of capital indicates that financing conditions remained consistent, thus the deteriorating economic profit primarily reflects operational and investment performance rather than changes in capital cost.
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.
- Economic Profit
- The economic profit experienced a substantial decline over the analyzed period. Starting at 5,556 million US dollars as of December 31, 2021, it decreased to 2,749 million in 2022 and further diminished to 1,839 million in 2023. By 2024, economic profit turned negative, recorded at -2,750 million US dollars, indicating a shift from profitability to economic loss.
- Invested Capital
- Invested capital showed a marked upward trend throughout the period. Beginning at 7,990 million US dollars at the end of 2021, it increased to 10,988 million in 2022 and then to 11,924 million in 2023. A more pronounced increase occurred in 2024, with invested capital reaching 22,822 million US dollars, nearly doubling from the previous year.
- Economic Spread Ratio
- The economic spread ratio followed a declining trajectory. Initially high at 69.53% at the end of 2021, it decreased significantly to 25.01% in 2022 and further down to 15.43% in 2023. By 2024, this ratio turned negative, registering at -12.05%, which reflects deteriorating returns relative to the cost of invested capital.
- Overall Insights
- The data reveals a concerning decline in profitability metrics despite substantial growth in invested capital. The decline in economic profit alongside increasing capital investment suggests diminishing returns on invested assets. The reversal to a negative economic spread ratio and economic profit in the final year indicates that the company may have faced operational or market challenges adversely affecting value creation.
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.
- Economic Profit
- The economic profit exhibited a declining trend over the observed period. Starting at 5556 million US dollars at the end of 2021, it decreased substantially to 2749 million in 2022 and further declined to 1839 million in 2023. In 2024, the company reported a negative economic profit of -2750 million US dollars, indicating a shift from profitability to loss on an economic profit basis.
- Revenues
- Revenues showed significant volatility during the period. There was a marked increase from 7301 million US dollars in 2021 to 14123 million in 2022, nearly doubling. However, this was followed by a sharp contraction to 6047 million in 2023 and a further decrease to 4259 million in 2024, demonstrating a substantial decline after the peak in 2022.
- Economic Profit Margin
- The economic profit margin mirrored the trends observed in economic profit and revenues. Beginning at a high margin of 76.1% in 2021, it dropped sharply to 19.46% in 2022. Despite a partial recovery to 30.42% in 2023, the margin turned negative, reaching -64.58% in 2024, reflecting reduced profitability relative to revenues and overall negative returns in the latest period.