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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Gilead Sciences Inc. pages available for free this week:
- Income Statement
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Economic Profit
Gilead Sciences 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 indicators reveal a mixed performance trajectory over the analyzed five-year period. The net operating profit after taxes (NOPAT) experienced significant fluctuations, starting at a modest level in the base year, soaring sharply in the subsequent year, then declining notably in the following years, with the final year showing a negative figure.
The cost of capital demonstrated a gradual upward trend, increasing from approximately 5.36% to 6.06%, indicating a rising expense associated with the company's capital structure over time.
Invested capital showed a consistent decline throughout the period, reducing from about US$50,285 million to approximately US$44,333 million, suggesting a contraction in the assets or resources deployed in the business operations.
Regarding economic profit, there was an initial negative value which turned strongly positive in the second year, followed by a decrease yet remaining positive in the third and fourth years, before dropping sharply into negative territory in the final year. This pattern signals variability in the company’s ability to generate returns exceeding the cost of capital, with particular weakness in the last year under review.
- Net Operating Profit After Taxes (NOPAT)
- Marked by volatility, peaking strongly in the second year before a downward trend leads to a negative outcome in the last year.
- Cost of Capital
- Gradually increasing over the period, reflecting rising financing costs or risk perceptions.
- Invested Capital
- Consistently decreasing, possibly due to asset sales, efficiency improvements, or strategic downsizing.
- Economic Profit
- Exhibited substantial improvement early on, then a decline with a significant loss in the final year, indicating challenges in value creation relative to capital costs.
Net Operating Profit after Taxes (NOPAT)
Gilead Sciences Inc., NOPAT calculation
US$ 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 allowances for credit losses.
3 Addition of increase (decrease) in equity equivalents to net income attributable to Gilead.
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 attributable to Gilead.
7 2024 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
- The net income experienced a significant increase from 123 million US dollars in 2020 to 6,225 million in 2021, marking a substantial positive shift. This was followed by a decrease to 4,592 million in 2022. In 2023, net income showed a recovery, increasing to 5,665 million, but then declined sharply to 480 million in 2024. Overall, the data indicates volatility with a peak in 2021, fluctuations thereafter, and a downward trend by the final year.
- Net operating profit after taxes (NOPAT)
- NOPAT followed a somewhat similar pattern initially, rising from 633 million US dollars in 2020 to a peak of 6,897 million in 2021. However, unlike net income, NOPAT declined more sharply to 3,687 million in 2022. It showed an improvement in 2023, rising to 5,086 million, before turning negative in 2024 with a value of -796 million. This negative figure in the last period signals a significant operational challenge or increased expenses resulting in operating losses after taxes.
Cash Operating Taxes
Gilead Sciences 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).
- Income Tax Expense
- The income tax expense displayed a fluctuating pattern over the examined periods. Starting at 1,580 million US dollars in 2020, the expense increased significantly to 2,077 million US dollars in 2021. This was followed by a sharp decline to 1,248 million US dollars in 2022, remaining relatively stable into 2023 with a negligible decrease to 1,247 million US dollars. Notably, in 2024, there was a pronounced drop to 211 million US dollars, marking the lowest point in the time series.
- Cash Operating Taxes
- Cash operating taxes showed a generally increasing trend from 2020 to 2022. Beginning at 2,006 million US dollars in 2020, they rose to 2,403 million US dollars in 2021 and further to a peak of 2,981 million US dollars in 2022. The trend reversed afterward, with a decrease to 2,366 million US dollars in 2023, followed by a continued decline to 2,205 million US dollars in 2024. Despite this reversal, cash operating taxes remained higher in the last two years compared to 2020 levels.
- Comparative Insights
- The data suggests a divergence between income tax expense and cash operating taxes beginning from 2022 onwards. While cash operating taxes peaked in 2022 and then declined, income tax expense sharply decreased in 2024, indicating possible changes in tax planning, accounting practices, or tax regulations impacting reporting differently from cash outflows related to operating taxes. The significant reduction in income tax expense by 2024 suggests a substantial alteration in either taxable income or effective tax rates.
Invested Capital
Gilead Sciences 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 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.
- Total reported debt & leases
- The total reported debt and leases decreased significantly from 32,117 million US dollars in 2020 to 25,808 million US dollars in 2022. This trend indicates a reduction in debt obligations over this period. However, from 2022 to 2023, the debt level remained relatively stable, showing only a slight decrease to 25,658 million US dollars. In 2024, there was an uptick in total debt, increasing to 27,322 million US dollars, suggesting a reversal of the prior debt reduction trend.
- Total Gilead stockholders’ equity
- Stockholders’ equity saw a consistent increase from 18,202 million US dollars in 2020 to a peak of 22,833 million US dollars in 2023. This upward movement reflects a strengthening of the company's equity base during these years. However, in 2024, equity fell notably to 19,330 million US dollars, implying a decrease in net assets attributable to shareholders, which could be due to various factors such as losses, dividends, or share repurchases.
- Invested capital
- Invested capital showed a declining trend throughout the period from 50,285 million US dollars in 2020 to 44,333 million US dollars in 2024. This steady decrease suggests a contraction in the total capital employed in the business, possibly due to asset disposals, changes in financing structure, or operational adjustments.
- Summary
- Overall, the company experienced a reduction in debt from 2020 to 2022, but this trend reversed in 2024. Equity increased notably until 2023, followed by a significant decline in 2024. Invested capital consistently decreased over the five years. These patterns suggest a shifting financial structure, with potential impacts on leverage and capital deployment in the most recent year.
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: 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 »
| 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: 2020-12-31).
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, 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 | ||||||
| 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: 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 experienced significant fluctuation over the given period. Starting with a substantial loss of 2,063 million USD in 2020, it sharply improved to a positive 4,280 million USD in 2021. Following this peak, the economic profit decreased to 1,018 million USD in 2022 but rebounded to 2,420 million USD in 2023. A notable downturn occurred in 2024, with economic profit falling to a negative 3,482 million USD.
- Invested Capital
- Invested capital showed a gradual decline from 50,285 million USD in 2020 to 44,333 million USD in 2024. This steady reduction suggests a consistent decrease in total capital invested in the business over the five-year span.
- Economic Spread Ratio
- The economic spread ratio closely mirrors the trend in economic profit. It started negatively at -4.1% in 2020, then rose significantly to 8.96% in 2021, indicating improved profitability relative to invested capital. In 2022, the spread ratio decreased to 2.23%, before improving again to 5.28% in 2023. However, similar to economic profit, the ratio fell dramatically to -7.85% in 2024, reflecting deteriorated performance and possibly negative returns relative to the cost of capital.
- Overall Insights
- The data reveals pronounced volatility in economic profitability and returns relative to invested capital across the observed years. After a strong recovery in 2021, both economic profit and spread ratio displayed fluctuating but generally declining trends, culminating in a negative performance in 2024. The consistent decline in invested capital may have influenced these dynamics. Such variability could point to underlying operational challenges or changing market conditions impacting financial performance.
Economic Profit Margin
Gilead Sciences 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 | ||||||
| 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: 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 ÷ Product sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit displayed significant fluctuations over the five-year period. Starting with a negative value of -2,063 million USD in 2020, it rebounded sharply to a positive 4,280 million USD in 2021. This was followed by a decline in 2022 to 1,018 million USD and then a recovery to 2,420 million USD in 2023. However, in 2024, economic profit fell considerably into negative territory again, reaching -3,482 million USD. This volatile trend indicates periods of substantial value creation interspersed with marked economic losses.
- Product Sales
- Product sales exhibited a generally upward trajectory from 2020 through 2024. Sales increased steadily from 24,355 million USD in 2020 to 27,008 million USD in 2021. However, sales plateaued somewhat in 2022 and 2023, hovering around 26,900 million USD. In 2024, there was a renewed increase, reaching 28,610 million USD. Despite this overall growth, the marginal changes in some years suggest a relatively stable revenue base within that period.
- Economic Profit Margin
- The economic profit margin reflected a pattern consistent with that of economic profit, with notable volatility. It started at a negative -8.47% in 2020, then increased substantially to a positive 15.85% in 2021. In 2022, the margin decreased sharply to 3.77%, followed by a partial recovery to 8.99% in 2023. By 2024, the margin declined again to -12.17%, indicating a return to unprofitable economic conditions relative to sales. The swings in margin emphasize fluctuations in profitability efficiency beyond sales performance alone.