Economic Value Added (EVA)
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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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- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2012
- Total Asset Turnover since 2012
- Price to Operating Profit (P/OP) since 2012
- Analysis of Revenues
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Economic Profit
Meta Platforms Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| 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), 10-K (reporting date: 2020-12-31).
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 data indicates notable fluctuations and general growth trends across the observed periods. Net operating profit after taxes (NOPAT) demonstrates variability, with a significant increase from 27,980 million US dollars in 2020 to a peak of 40,147 million in 2021, followed by a decline to 20,828 million in 2022. Subsequently, NOPAT rebounds substantially to 38,290 million in 2023 and further to 56,844 million in 2024, indicating overall positive operational performance with interim volatility.
The cost of capital remains relatively stable throughout the periods, with minor fluctuations between 15.96% and 16.45%, suggesting that the company’s required return on invested capital maintains a consistent baseline cost despite changes in market conditions or internal financial strategy.
Invested capital shows a continuous upward trajectory, increasing from 80,951 million in 2020 to 165,969 million in 2024. This consistent growth reflects ongoing capital deployment, possibly for expansion, acquisitions, or reinvestment, which indicates a strategic commitment to long-term asset base enhancement.
Economic profit exhibits significant variation, starting at 14,664 million in 2020 and rising sharply to 24,981 million in 2021. A marked decrease to 4,590 million occurs in 2022, mirroring the dip in NOPAT. However, economic profit recovers to 15,326 million in 2023 and climbs again to 29,784 million in 2024. Despite volatility, this trend suggests the firm is generating value above its cost of capital, reinforcing positive shareholder value creation over time, particularly in the latter periods.
Net Operating Profit after Taxes (NOPAT)
Meta Platforms Inc., 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), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in deferred revenue.
3 Addition of increase (decrease) in accrued severance and other personnel liabilities.
4 Addition of increase (decrease) in equity equivalents to net income.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 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 2024 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 Income
- The net income demonstrates variability over the analyzed period. It increased significantly from 29,146 million US dollars in 2020 to 39,370 million US dollars in 2021. However, in 2022, there is a notable decline to 23,200 million US dollars. This downward trend reverses in 2023, with net income rising sharply to 39,098 million US dollars and continuing the upward trajectory to reach 62,360 million US dollars in 2024. Overall, the trend reflects periods of both volatility and robust growth, culminating in a substantial increase by the end of the period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT follows a similar pattern to net income, with an increase from 27,980 million US dollars in 2020 to 40,147 million US dollars in 2021. Subsequently, it decreases to 20,828 million US dollars in 2022, which aligns with the downturn observed in net income for the same year. In 2023, NOPAT recovers significantly to 38,290 million US dollars, and continues to improve, reaching 56,844 million US dollars in 2024. This trend suggests operational profitability experienced fluctuations but ultimately improved substantially by the end of the period, indicating enhanced operational efficiency or favorable business conditions in the latter years.
Cash Operating Taxes
Meta Platforms Inc., 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), 10-K (reporting date: 2020-12-31).
- Provision for Income Taxes
- The provision for income taxes exhibited a fluctuating trend over the analyzed periods. It increased significantly from 4,034 million US dollars in 2020 to 7,914 million US dollars in 2021, indicating higher estimated tax obligations. Subsequently, it declined to 5,619 million in 2022, showing a reduction in estimated tax expense. However, the provision rose again to 8,330 million in 2023 and slightly decreased to 8,303 million in 2024, stabilizing at a higher level compared to earlier years. This pattern suggests variability in taxable income or changes in tax regulations impacting the company's tax liabilities.
- Cash Operating Taxes
- Cash operating taxes demonstrated an overall upward trajectory with some volatility. Beginning at 4,959 million US dollars in 2020, the cash taxes paid increased to 7,290 million in 2021. An increase continued in 2022 reaching 8,950 million, followed by a decrease to 8,095 million in 2023. In 2024, cash operating taxes rose sharply to 12,827 million, marking the highest value in the series. The sharp increase in the final period suggests stronger cash outflows related to tax payments, possibly due to tax timing differences, higher taxable income, or changes in tax payment schedules.
- Comparative Observations
- While the provision for income taxes reflects estimated tax expenses, cash operating taxes represent actual cash paid. The data shows instances where cash taxes surpassed the provision, notably in 2022 and 2024, which may point to timing differences or adjustments based on prior estimates. The significant rise in cash operating taxes in 2024 contrasts with the relatively stable provision, highlighting a potential shift in cash tax management or tax obligations becoming due. Overall, the tax-related expenses and payments show variability but an increasing trend, especially on a cash basis, which could affect the company's liquidity and cash flow management.
Invested Capital
Meta Platforms Inc., 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), 10-K (reporting date: 2020-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of deferred revenue.
4 Addition of accrued severance and other personnel liabilities.
5 Addition of equity equivalents to stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable securities.
The financial data reveals notable trends in the company’s leverage, equity base, and invested capital over the five-year period from 2020 to 2024.
- Total Reported Debt & Leases
- This item exhibits a substantial and accelerating increase over the years. From $11,177 million in 2020, the debt and leases almost doubled by 2022 to $27,278 million and then continued to rise sharply to reach $49,769 million in 2024. This trend indicates a significant expansion in the company's liabilities, suggesting increased borrowing or leasing commitments, which could be aimed at financing growth, acquisitions, or capital expenditures.
- Stockholders’ Equity
- Stockholders' equity shows some fluctuations initially, with a slight decrease from $128,290 million in 2020 to $124,879 million in 2021, then a small rise to $125,713 million in 2022. From 2022 onwards, there is a strong upward trend, culminating in a value of $182,637 million in 2024. This pattern reflects an overall strengthening in the company’s net asset base, which may result from retained earnings growth, successful profitability, or equity issuances.
- Invested Capital
- Invested capital consistently grows over the period, increasing from $80,951 million in 2020 to $165,969 million in 2024. The growth pace accelerates especially after 2021, indicating that the company is increasing its long-term investments and assets base substantially. This could correspond with strategic initiatives to enhance operational capacity, assets acquisition, or overall expansion.
Overall, the data illustrates a company that is increasing its financial leverage considerably while simultaneously growing its equity base and invested capital. This combination may suggest an aggressive growth strategy supported by both debt financing and equity strength, potentially positioning the company for expanded operations or investment in new opportunities. However, the rising debt levels also imply greater financial risk that should be managed carefully.
Cost of Capital
Meta Platforms Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term 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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term 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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term 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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Meta Platforms Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
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), 10-K (reporting date: 2020-12-31).
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 exhibited significant fluctuations over the observed periods. Starting at 14,664 million US dollars at the end of 2020, it increased substantially to 24,981 million by the end of 2021. However, a sharp decline was observed in 2022, where economic profit dropped to 4,590 million. This was followed by a recovery phase with economic profit rising to 15,326 million in 2023 and further increasing to 29,784 million by the end of 2024. Overall, the trend shows volatility with a strong recovery in the last two years.
- Invested Capital
- Invested capital demonstrated a steady and consistent upward trend throughout the entire period. Beginning at 80,951 million US dollars in 2020, it rose to 92,809 million in 2021 and continued its growth to 101,764 million at the end of 2022. This growth accelerated in 2023, reaching 141,324 million, and further expanded to 165,969 million by the end of 2024. The increasing invested capital indicates ongoing expansion and possibly increased asset deployment.
- Economic Spread Ratio
- The economic spread ratio showed notable variability. It started at 18.12% in 2020, increased to a peak of 26.92% in 2021, before sharply declining to 4.51% at the end of 2022. The ratio then improved to 10.84% in 2023 and increased further to 17.95% by 2024. Despite the drop in 2022, the later periods indicate a recovery in the efficiency of capital utilization relative to cost.
- Summary Insight
- While invested capital steadily increased over the five-year span, economic profit and economic spread ratio displayed volatility, particularly noticeable in the sharp declines observed in 2022. The subsequent recovery in 2023 and 2024 suggests the company experienced challenges impacting profitability and capital efficiency in 2022 but managed a significant rebound in the following years. The upward trend in invested capital alongside recovery in profit and spread ratios may reflect strategic investment decisions yielding improved returns over time.
Economic Profit Margin
Meta Platforms Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data over the five-year period reveals fluctuating yet generally positive trends in key performance measures.
- Economic Profit
- The economic profit shows a notable increase from 14,664 million US dollars in 2020 to 24,981 million in 2021, reflecting strong growth. However, it experiences a significant decline in 2022, falling to 4,590 million, which represents a substantial drop. Subsequently, there is a recovery over the next two years, with economic profit rising to 15,326 million in 2023 and further increasing to 29,784 million in 2024, surpassing prior peak levels from 2021.
- Adjusted Revenue
- Adjusted revenue demonstrates consistent growth over the period, rising from 86,066 million US dollars in 2020 to 118,154 million in 2021. A slight decrease is observed in 2022, with revenue marginally declining to 116,539 million. This is followed by a notable increase in 2023 to 135,051 million and continued growth to 164,598 million in 2024. Overall, the revenue trajectory remains upward despite the minor setback in 2022.
- Economic Profit Margin
- The economic profit margin percentage aligns closely with the economic profit trend, peaking at 21.14% in 2021. It declines sharply in 2022 to 3.94%, indicating reduced profitability relative to revenue in that year. The margin then improves to 11.35% in 2023 and further ascends to 18.09% in 2024, demonstrating enhanced efficiency or profitability in the latter years of the period.
In summary, the data indicate an overall growth trajectory with a pronounced disruption in 2022, where both economic profit and profit margin decreased significantly despite stable revenue. The company showed strong recovery and growth momentum in the following years, achieving higher economic profit and improved margins by 2024. This suggests effective management responses or favorable market conditions post-2022 that enhanced profitability and revenue generation capacity.