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
Gilead Sciences Inc. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value (EV)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Gilead Sciences Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Gilead Sciences Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2025 | 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: 2025-12-31), 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 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The period under review demonstrates significant fluctuations in economic profit. Net operating profit after taxes (NOPAT) exhibited volatility, decreasing substantially in 2022 before partially recovering in 2023, experiencing a significant loss in 2024, and then a strong rebound in 2025. Concurrently, the cost of capital generally increased over the five-year period, while invested capital showed a gradual decline.
- Economic Profit Trend
- Economic profit began at US$3,340 million in 2021, decreased dramatically to near zero in 2022 (-US$2 million), increased to US$1,427 million in 2023, then fell sharply to a loss of US$4,518 million in 2024. A substantial recovery occurred in 2025, with economic profit reaching US$5,523 million. This pattern suggests a sensitivity to changes in NOPAT and cost of capital.
- NOPAT Analysis
- NOPAT decreased from US$6,897 million in 2021 to US$3,687 million in 2022, representing a substantial decline. A partial recovery to US$5,086 million was observed in 2023, but this was followed by a significant loss of US$796 million in 2024. The final year saw a strong positive swing, with NOPAT reaching US$9,207 million in 2025. These fluctuations heavily influenced the economic profit trend.
- Cost of Capital Evolution
- The cost of capital increased from 7.44% in 2021 to 8.10% in 2022, then decreased slightly to 7.99% in 2023. It rose again to 8.40% in 2024 and continued to 8.61% in 2025. This consistent upward pressure, even with minor fluctuations, contributed to the challenges in generating positive economic profit, particularly in years with lower NOPAT.
- Invested Capital Movement
- Invested capital decreased steadily over the period, from US$47,782 million in 2021 to US$42,812 million in 2025. While a consistent trend, the decrease in invested capital did not consistently offset the impact of NOPAT fluctuations and the rising cost of capital on economic profit.
The significant volatility in economic profit highlights the interplay between operational performance (as reflected in NOPAT), the cost of financing investments, and the level of invested capital. The substantial improvement in 2025 suggests a positive shift in these factors, but the prior period demonstrates considerable risk and sensitivity to external and internal changes.
Net Operating Profit after Taxes (NOPAT)
Gilead Sciences Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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 allowances for credit losses.
3 Addition of increase (decrease) in equity equivalents to net income attributable to Gilead.
4 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2025 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 attributable to Gilead.
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
Net income attributable to Gilead and Net Operating Profit After Taxes (NOPAT) exhibited considerable fluctuation between 2021 and 2025. While both metrics moved in similar directions, the magnitude of change differed, particularly in 2024.
- Overall Trend
- From 2021 to 2025, NOPAT demonstrated a volatile pattern. It decreased significantly in 2022, recovered partially in 2023, experienced a substantial loss in 2024, and then rebounded strongly in 2025, ultimately exceeding the 2021 level. Net income followed a similar, though less dramatic, trajectory.
- 2021-2022
- A notable decline is observed in both NOPAT and net income from 2021 to 2022. NOPAT decreased from US$6,897 million to US$3,687 million, representing a decrease of approximately 46.7%. Net income decreased from US$6,225 million to US$4,592 million, a decrease of approximately 26.2%. This suggests a weakening of operational profitability and overall earnings during this period.
- 2022-2023
- Both metrics showed improvement between 2022 and 2023, although the recovery was not complete. NOPAT increased to US$5,086 million, while net income rose to US$5,665 million. This indicates a partial recovery in profitability and earnings.
- 2023-2024
- A significant shift occurred from 2023 to 2024. NOPAT experienced a substantial loss, falling to negative US$796 million. Net income also plummeted to US$480 million. This represents a dramatic downturn in operational performance and overall profitability. The disparity between the decline in net income and the loss in NOPAT suggests potential impacts from non-operating items or changes in the tax structure.
- 2024-2025
- A strong recovery is evident from 2024 to 2025. NOPAT rebounded to US$9,207 million, surpassing the 2021 value. Net income also increased substantially to US$8,510 million. This indicates a significant improvement in operational profitability and overall earnings, potentially driven by new products, cost reductions, or favorable market conditions.
The fluctuations in NOPAT, particularly the substantial loss in 2024 followed by a strong recovery in 2025, warrant further investigation to understand the underlying drivers of these changes. The divergence between NOPAT and net income trends in 2024 also merits closer scrutiny.
Cash Operating Taxes
Gilead Sciences Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The relationship between income tax expense and cash operating taxes demonstrates fluctuating patterns over the five-year period. While both metrics represent tax-related financial obligations, their divergence suggests timing differences between reported accounting expense and actual cash outflows.
- Income Tax Expense
- Income tax expense decreased significantly from 2021 to 2022, followed by a minimal change in 2023. A substantial decline occurred in 2024, reaching a low of 211 US$ millions, before increasing again in 2025 to 1,286 US$ millions. This pattern indicates considerable volatility in the company’s reported tax liability.
- Cash Operating Taxes
- Cash operating taxes increased from 2021 to 2022, reaching 2,981 US$ millions. A subsequent decrease was observed in 2023, followed by a further reduction in 2024 to 2,205 US$ millions. The most significant decline occurred between 2024 and 2025, with cash operating taxes falling to 1,273 US$ millions. This suggests a reduction in actual cash paid for taxes in the most recent year.
- Relationship between Metrics
- In 2021 and 2022, cash operating taxes exceeded income tax expense, indicating potential deferred tax liabilities being realized or other timing differences. The gap narrowed in 2023 and 2024. By 2025, income tax expense surpassed cash operating taxes, potentially due to the creation of new deferred tax assets or changes in tax regulations impacting reported expense without immediate cash impact. The divergence between these two figures warrants further investigation to understand the underlying causes and their implications for future cash flows and financial reporting.
The observed trends suggest that the company’s effective tax rate and cash tax payments are subject to considerable variation, potentially influenced by factors such as tax credits, loss carryforwards, or changes in the tax code. Continued monitoring of these metrics is recommended to assess the sustainability of these trends and their impact on overall financial performance.
Invested Capital
Gilead Sciences Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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 total Gilead stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
7 Subtraction of marketable debt securities.
The invested capital of the company demonstrates a generally decreasing trend over the five-year period. Total reported debt & leases and total stockholders’ equity are the components used to calculate invested capital, and their individual movements contribute to this overall pattern.
- Invested Capital Trend
- Invested capital began at US$47,782 million in 2021 and generally declined to US$42,812 million in 2025. A slight decrease was observed from 2021 to 2022, followed by relative stability between 2022 and 2023. A more pronounced decrease occurred between 2023 and 2024, and this downward trend continued into 2025.
- Debt & Leases
- Total reported debt & leases decreased from US$27,285 million in 2021 to US$25,808 million in 2022, representing a reduction in financial obligations. It remained relatively stable through 2023 at US$25,658 million before increasing to US$27,322 million in 2024. A subsequent decrease to US$25,541 million was noted in 2025.
- Stockholders’ Equity
- Total stockholders’ equity exhibited a modest increase from US$21,069 million in 2021 to US$21,240 million in 2022, and continued to rise to US$22,833 million in 2023. However, a significant decrease was observed in 2024, falling to US$19,330 million. Stockholders’ equity partially recovered in 2025, reaching US$22,703 million.
The fluctuations in stockholders’ equity appear to have a more substantial impact on the overall invested capital trend, particularly the decline observed in 2024. While debt & leases experienced some volatility, its impact was less pronounced than the changes in equity. The combined effect of these components resulted in the observed decrease in invested capital over the period.
Cost of Capital
Gilead Sciences Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (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, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (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, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (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, net. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, net3 | ÷ | = | × | × (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, net. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Gilead Sciences Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | 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 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The economic spread ratio exhibited significant fluctuations between 2021 and 2025. Initial values were positive, declining to a negative value before recovering substantially. This movement correlates with changes in economic profit and invested capital over the period.
- Economic Spread Ratio Trend
- In 2021, the economic spread ratio stood at 6.99%. This indicates a relatively strong relationship between returns generated and capital employed. A sharp decline occurred in 2022, with the ratio falling to 0.00%, suggesting returns barely covered the cost of capital. The ratio became negative in 2023, reaching -10.19% in 2024, indicating that returns were insufficient to cover the cost of capital. A substantial recovery was observed in 2025, with the ratio increasing to 12.90%, demonstrating a significant improvement in the relationship between returns and capital employed.
- Relationship to Economic Profit
- The economic spread ratio’s trajectory closely mirrors the fluctuations in economic profit. The positive spread in 2021 aligns with a substantial economic profit of US$3,340 million. The near-zero spread in 2022 corresponds with a minimal economic profit of US$ -2 million. The negative spreads in 2023 and 2024 coincide with economic profits of US$1,427 million and US$ -4,518 million, respectively. The strong positive spread in 2025 is associated with a significant economic profit of US$5,523 million.
- Relationship to Invested Capital
- Invested capital generally decreased over the five-year period, moving from US$47,782 million in 2021 to US$42,812 million in 2025. While the decreasing invested capital might contribute to a higher economic spread ratio when economic profit is positive, it does not fully explain the dramatic swings observed. The negative economic spread in 2024 occurred despite a reduction in invested capital, indicating that the primary driver of the ratio’s performance was the substantial decline in economic profit during that year.
Overall, the economic spread ratio demonstrates a volatile pattern, heavily influenced by the company’s economic profit. The substantial recovery in 2025 suggests a return to generating returns exceeding the cost of capital, but the prior negative spread in 2024 warrants further investigation.
Economic Profit Margin
Gilead Sciences Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Product sales | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Product sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The economic profit margin exhibited significant fluctuation between 2021 and 2025. Initial profitability declined sharply before recovering to levels exceeding those initially observed. A detailed examination of the trends is presented below.
- Economic Profit Margin
- In 2021, the economic profit margin stood at 12.37%. This represents a substantial level of economic profit generation relative to product sales. A dramatic shift occurred in 2022, with the margin decreasing to -0.01%, indicating a near-breakeven position from an economic profit perspective. The margin recovered partially in 2023, reaching 5.30%, suggesting improved economic profitability. However, 2024 witnessed a significant decline, with the margin falling to -15.79%, representing a substantial economic loss. Finally, the margin rebounded strongly in 2025, reaching 19.10%, surpassing the 2021 level and indicating a considerable increase in economic profit generation.
The economic profit margin’s volatility closely mirrors the fluctuations in economic profit itself. The negative margins in 2022 and 2024 correspond to negative economic profit values, while positive margins in 2021, 2023, and 2025 align with positive economic profit. Product sales remained relatively stable between 2021 and 2023, with a slight increase observed in 2024 and 2025. The substantial swings in the economic profit margin, despite relatively consistent product sales, suggest that changes in the cost of capital or operational efficiency significantly impacted economic profitability during the analyzed period.
The substantial improvement in the economic profit margin in 2025 warrants further investigation to understand the underlying drivers of this positive change. Conversely, the causes of the significant decline in 2024 should be examined to prevent similar occurrences in the future.