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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.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Fiserv Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net operating profit after taxes (NOPAT)¹	1,797)	1,728)	1,565)	1,322)	1,176)
Cost of capital²	9.41%	9.80%	9.74%	10.58%	10.53%
Invested capital³	59,700)	60,165)	62,514)	9,909)	9,201)

Economic profit⁴	(3,821)	(4,167)	(4,527)	274)	207)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,797 – 9.41% × 59,700 = -3,821

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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.	Fiserv Inc. economic profit increased from 2019 to 2020 and from 2020 to 2021.

Fiserv Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income attributable to Fiserv, Inc.	1,334)	958)	893)	1,187)	1,246)
Deferred income tax expense (benefit)¹	(262)	71)	47)	133)	(247)
Increase (decrease) in allowance for doubtful accounts²	7)	9)	21)	3)	—)
Increase (decrease) in contract liabilities³	77)	86)	178)	(161)	69)
Increase (decrease) in employee termination costs reserve⁴	9)	13)	14)	—)	—)
Increase (decrease) in equity equivalents⁵	(169)	179)	260)	(25)	(178)
Interest expense	696)	716)	507)	193)	176)
Interest expense, operating lease liability⁶	20)	17)	22)	14)	12)
Adjusted interest expense	716)	733)	529)	207)	188)
Tax benefit of interest expense⁷	(150)	(154)	(111)	(43)	(66)
Adjusted interest expense, after taxes⁸	566)	579)	418)	163)	122)
Interest income	(3)	(7)	(34)	(4)	(1)
Investment income, before taxes	(3)	(7)	(34)	(4)	(1)
Tax expense (benefit) of investment income⁹	1)	1)	7)	1)	—)
Investment income, after taxes¹⁰	(2)	(6)	(27)	(3)	(1)
(Income) loss from discontinued operations, net of tax¹¹	—)	—)	—)	—)	(14)
Net income (loss) attributable to noncontrolling interest	69)	17)	21)	—)	—)
Net operating profit after taxes (NOPAT)	1,797)	1,728)	1,565)	1,322)	1,176)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Elimination of deferred tax expense. See details »

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

³ Addition of increase (decrease) in contract liabilities.

⁴ Addition of increase (decrease) in employee termination costs reserve.

⁵ Addition of increase (decrease) in equity equivalents to net income attributable to Fiserv, Inc..

⁶ 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 737 × 2.70% = 20

⁷ 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 716 × 21.00% = 150

⁸ Addition of after taxes interest expense to net income attributable to Fiserv, Inc..

⁹ 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 3 × 21.00% = 1

¹⁰ Elimination of after taxes investment income.

¹¹ Elimination of discontinued operations.

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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.	Fiserv Inc. NOPAT increased from 2019 to 2020 and from 2020 to 2021.

Fiserv Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Income tax provision	363)	196)	198)	378)	158)
Less: Deferred income tax expense (benefit)	(262)	71)	47)	133)	(247)
Add: Tax savings from interest expense	150)	154)	111)	43)	66)
Less: Tax imposed on investment income	1)	1)	7)	1)	—)
Cash operating taxes	775)	278)	255)	288)	471)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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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.	Fiserv Inc. cash operating taxes increased from 2019 to 2020 and from 2020 to 2021.

Fiserv Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Short-term and current maturities of long-term debt	508)	384)	287)	4)	3)
Long-term debt, excluding current maturities	20,729)	20,300)	21,612)	5,955)	4,897)
Operating lease liability¹	737)	596)	743)	378)	366)
Total reported debt & leases	21,974)	21,280)	22,642)	6,337)	5,266)
Total Fiserv, Inc. shareholders’ equity	30,952)	32,330)	32,979)	2,293)	2,731)
Net deferred tax (assets) liabilities²	4,130)	4,361)	4,135)	725)	529)
Allowance for doubtful accounts³	55)	48)	39)	18)	15)
Contract liabilities⁴	810)	733)	647)	469)	606)
Employee termination costs reserve⁵	36)	27)	14)	—)	—)
Equity equivalents⁶	5,031)	5,169)	4,835)	1,212)	1,150)
Accumulated other comprehensive (income) loss, net of tax⁷	745)	387)	180)	67)	54)
Redeemable noncontrolling interests	278)	259)	262)	—)	—)
Noncontrolling interests	720)	740)	1,616)	—)	—)
Adjusted total Fiserv, Inc. shareholders’ equity	37,726)	38,885)	39,872)	3,572)	3,935)
Invested capital	59,700)	60,165)	62,514)	9,909)	9,201)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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 contract liabilities.

⁵ Addition of employee termination costs reserve.

⁶ Addition of equity equivalents to total Fiserv, Inc. shareholders’ equity.

⁷ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Fiserv Inc. invested capital decreased from 2019 to 2020 and from 2020 to 2021.

Fiserv Inc., cost of capital calculations

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	62,324)	62,324)	÷	85,657)	=	0.73	0.73	×	12.06%	=	8.77%
Debt³	22,596)	22,596)	÷	85,657)	=	0.26	0.26	×	2.97% × (1 – 21.00%)	=	0.62%
Operating lease liability⁴	737)	737)	÷	85,657)	=	0.01	0.01	×	2.70% × (1 – 21.00%)	=	0.02%
Total:	85,657)					1.00					9.41%

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 »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	77,236)	77,236)	÷	101,076)	=	0.76	0.76	×	12.06%	=	9.21%
Debt³	23,244)	23,244)	÷	101,076)	=	0.23	0.23	×	3.14% × (1 – 21.00%)	=	0.57%
Operating lease liability⁴	596)	596)	÷	101,076)	=	0.01	0.01	×	2.90% × (1 – 21.00%)	=	0.01%
Total:	101,076)					1.00					9.80%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	73,709)	73,709)	÷	97,436)	=	0.76	0.76	×	12.06%	=	9.12%
Debt³	22,984)	22,984)	÷	97,436)	=	0.24	0.24	×	3.25% × (1 – 21.00%)	=	0.61%
Operating lease liability⁴	743)	743)	÷	97,436)	=	0.01	0.01	×	3.00% × (1 – 21.00%)	=	0.02%
Total:	97,436)					1.00					9.74%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,187)	33,187)	÷	39,574)	=	0.84	0.84	×	12.06%	=	10.11%
Debt³	6,009)	6,009)	÷	39,574)	=	0.15	0.15	×	3.69% × (1 – 21.00%)	=	0.44%
Operating lease liability⁴	378)	378)	÷	39,574)	=	0.01	0.01	×	3.69% × (1 – 21.00%)	=	0.03%
Total:	39,574)					1.00					10.58%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	29,363)	29,363)	÷	34,738)	=	0.85	0.85	×	12.06%	=	10.19%
Debt³	5,009)	5,009)	÷	34,738)	=	0.14	0.14	×	3.36% × (1 – 35.00%)	=	0.31%
Operating lease liability⁴	366)	366)	÷	34,738)	=	0.01	0.01	×	3.36% × (1 – 35.00%)	=	0.02%
Total:	34,738)					1.00					10.53%

Based on: 10-K (reporting date: 2017-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Fiserv Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(3,821)	(4,167)	(4,527)	274)	207)
Invested capital²	59,700)	60,165)	62,514)	9,909)	9,201)
Performance Ratio
Economic spread ratio³	-6.40%	-6.93%	-7.24%	2.76%	2.25%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	10.76%	11.33%	10.05%	10.29%	—
Adobe Inc.	13.50%	5.77%	3.87%	1.52%	—
International Business Machines Corp.	-4.31%	-4.05%	-0.32%	—	—
Intuit Inc.	2.82%	6.15%	19.82%	17.52%	—
Microsoft Corp.	33.05%	31.07%	26.19%	7.85%	—
Oracle Corp.	7.24%	1.54%	4.26%	-4.74%	—
Palo Alto Networks Inc.	-1.86%	-2.90%	0.35%	-2.47%	—
Salesforce Inc.	-7.16%	-10.20%	-6.20%	—	—
ServiceNow Inc.	5.71%	7.33%	6.74%	—	—
Synopsys Inc.	-2.95%	-2.78%	-5.77%	-7.15%	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,821 ÷ 59,700 = -6.40%

⁴ Click competitor name to see calculations.

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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.	Fiserv Inc. economic spread ratio improved from 2019 to 2020 and from 2020 to 2021.

Fiserv Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Economic profit¹	(3,821)	(4,167)	(4,527)	274)	207)

Revenue	16,226)	14,852)	10,187)	5,823)	5,696)
Add: Increase (decrease) in contract liabilities	77)	86)	178)	(161)	69)
Adjusted revenue	16,303)	14,938)	10,365)	5,662)	5,765)
Performance Ratio
Economic profit margin²	-23.44%	-27.89%	-43.67%	4.84%	3.59%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	5.52%	5.76%	4.65%	4.32%	—
Adobe Inc.	16.82%	8.28%	5.82%	2.49%	—
International Business Machines Corp.	-8.22%	-7.04%	-0.54%	—	—
Intuit Inc.	3.58%	6.93%	13.21%	11.64%	—
Microsoft Corp.	27.44%	23.07%	19.37%	5.57%	—
Oracle Corp.	14.32%	3.52%	7.76%	-8.55%	—
Palo Alto Networks Inc.	-2.50%	-4.70%	0.38%	-3.66%	—
Salesforce Inc.	-16.43%	-25.12%	-12.20%	—	—
ServiceNow Inc.	4.94%	5.98%	4.94%	—	—
Synopsys Inc.	-4.69%	-4.77%	-9.97%	-12.20%	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ Economic profit. See details »

² 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × -3,821 ÷ 16,303 = -23.44%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company 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.	Fiserv Inc. economic profit margin improved from 2019 to 2020 and from 2020 to 2021.

Fiserv Inc. (NASDAQ:FISV)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin