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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Intuitive Surgical Inc. pages available for free this week:
- Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Current Ratio since 2005
- Price to Operating Profit (P/OP) since 2005
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Economic Profit
Intuitive Surgical Inc., economic profit calculation
US$ in thousands
| 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 analysis of the financial data indicates notable fluctuations and growth patterns over the observed periods.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT shows significant variability across the years. Starting at approximately $1.15 billion in 2020, it surged to $1.7 billion in 2021, followed by a decline to $1.19 billion in 2022. Subsequently, it increased again to about $1.6 billion in 2023 and reached a peak of approximately $2.24 billion in 2024. This pattern suggests periods of substantial profit growth interspersed with a downturn, indicating possible cyclical or operational challenges during 2022.
- Cost of Capital
- The cost of capital remained remarkably stable throughout the entire period, consistently around 18.6%. This stability provides a constant benchmark for evaluating returns and economic profit.
- Invested Capital
- There is a clear trend of steady growth in invested capital. Beginning at about $4.49 billion in 2020, it slightly increased to $4.52 billion in 2021, followed by a marked jump to $5.4 billion in 2022, then reaching $7.16 billion in 2023 and $7.8 billion in 2024. The substantial increases from 2022 onwards suggest significant investments or capital expansion activities.
- Economic Profit
- Economic profit demonstrates strong fluctuations aligned with changes in NOPAT and invested capital. Starting at around $315 million in 2020, it peaked sharply at nearly $860 million in 2021, dropped considerably to about $185 million in 2022, then rose again to approximately $265 million in 2023 and surged to nearly $792 million in 2024. These swings imply varying effectiveness in generating returns above the cost of capital, with 2021 and 2024 being particularly strong years.
Overall, the data reveals a company experiencing growth in capital investment accompanied by variable profitability. The cost of capital's consistency allows for clearer interpretation of economic profit trends, which reflect significant shifts in the company's operational efficiency and return generation over the period.
Net Operating Profit after Taxes (NOPAT)
Intuitive Surgical Inc., NOPAT calculation
US$ in thousands
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.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income attributable to Intuitive Surgical, Inc..
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 attributable to Intuitive Surgical, Inc..
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.
The financial performance of the company over the analyzed five-year period reveals notable fluctuations and an overall upward trajectory in profitability metrics.
- Net Income Attributable to the Company
- The net income shows growth from 1,060,600 thousand USD in 2020 to 1,704,600 thousand USD in 2021, representing a significant increase. However, in 2022, there was a decline to 1,322,300 thousand USD. Subsequently, the net income rose again to 1,798,000 thousand USD in 2023 and further increased to 2,322,600 thousand USD in 2024. This trend suggests strong recovery and expansion in profitability following the dip in 2022.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT began at 1,149,207 thousand USD in 2020 and increased to 1,700,018 thousand USD in 2021, indicating improved operational efficiency or performance. Similar to net income, NOPAT decreased to 1,187,823 thousand USD in 2022, followed by a recovery to 1,596,933 thousand USD in 2023. By 2024, NOPAT reached 2,242,154 thousand USD, the highest point in the period analyzed. This reflects a strengthening operational position and effective management of after-tax operating profit.
Overall, both net income and NOPAT exhibit a clear pattern of initial growth, a temporary downturn in 2022, and a subsequent robust recovery through 2024. The increase in these key profitability measures in the final two years highlights enhanced financial performance and possibly improvements in market conditions, operational efficiency, or cost management strategies.
Cash Operating Taxes
Intuitive Surgical Inc., cash operating taxes calculation
US$ in thousands
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 exhibited a generally upward trend over the analyzed period with some variability. Starting at 140,200 thousand USD at the end of 2020, it increased to 162,200 thousand USD in 2021. A significant jump was observed in 2022 when the value rose sharply to 262,400 thousand USD. This was followed by a notable decrease in 2023 to 141,600 thousand USD, nearly returning to the 2020 level. However, in 2024, the tax expense surged to its highest point in the period at 336,300 thousand USD. This volatility indicates fluctuating taxable income or varying tax rates and regulations affecting the tax liabilities.
- Cash Operating Taxes
- The cash operating taxes showed a marked increasing trend throughout the period. Beginning at 82,150 thousand USD in 2020, the figure nearly tripled by 2021 to 226,657 thousand USD. The upward trajectory continued with a sharp increase to 448,291 thousand USD in 2022, followed by a slight decline to 423,020 thousand USD in 2023. In 2024, the cash operating taxes rose again to 472,970 thousand USD. The steady rise suggests growing operational profitability or changes in tax cash payment practices. The slight dip in 2023 could reflect timing differences in tax payments or adjustments in taxable income.
- Comparative Observations
- The relationship between income tax expense and cash operating taxes indicates a different pattern in volatility and behavior. While the income tax expense showed significant fluctuations, cash operating taxes tended to increase consistently with minor deviations. This may suggest differences in accounting recognition versus actual cash tax payments, highlighting potential timing differences or altered tax strategies.
Invested Capital
Intuitive Surgical Inc., invested capital calculation (financing approach)
US$ in thousands
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 deferred revenue.
5 Addition of equity equivalents to total Intuitive Surgical, Inc. stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction-in-process.
8 Subtraction of available-for-sale marketable securities.
- Total reported debt & leases
- The total reported debt and leases showed a gradual increase from 79,900 thousand USD at the end of 2020 to 93,800 thousand USD by the end of 2022. In 2023, there was a slight decline to 89,800 thousand USD, followed by a significant rise to 146,000 thousand USD in 2024. This pattern indicates a generally upward trend in liabilities with a notable acceleration in debt levels during the most recent year.
- Total stockholders’ equity
- Stockholders' equity grew consistently over the analyzed period, starting from 9,731,500 thousand USD in 2020 and rising to 16,433,700 thousand USD by the end of 2024. There was a dip observed in 2022, where equity decreased to 11,041,900 thousand USD from 11,901,100 thousand USD in 2021. However, this was followed by substantial growth in the subsequent years, reaching the highest recorded value in 2024. Overall, the equity position strengthened considerably, reflecting a growing net asset base.
- Invested capital
- Invested capital displayed a steady increase throughout the period. It began at 4,486,200 thousand USD in 2020 and moved marginally to 4,517,800 thousand USD in 2021. From 2022 onwards, there was significant expansion, with invested capital reaching 5,396,200 thousand USD, then sharply increasing to 7,159,800 thousand USD in 2023 and further to 7,798,800 thousand USD in 2024. This demonstrates an intensifying commitment of resources into operations or assets over these years.
Cost of Capital
Intuitive Surgical Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
Economic Spread Ratio
Intuitive Surgical 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 thousands) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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.
The financial data for the given periods reflects notable fluctuations and trends in economic profit, invested capital, and the economic spread ratio.
- Economic Profit
- The economic profit demonstrates a fluctuating pattern. Starting at approximately 315 million USD in 2020, it substantially increased to nearly 860 million USD in 2021. However, there was a marked decrease to around 185 million USD in 2022, followed by a moderate recovery to about 265 million USD in 2023. By 2024, economic profit surged again, reaching approximately 792 million USD. This pattern indicates volatility in profitability with a significant rebound at the end of the period.
- Invested Capital
- Invested capital shows a consistent upward trend throughout the timeframe. It increased from roughly 4.49 billion USD in 2020 to around 4.52 billion USD in 2021, followed by a more pronounced rise to approximately 5.40 billion USD in 2022. The growth accelerated significantly in 2023 to about 7.16 billion USD and continued to grow in 2024, reaching nearly 7.80 billion USD. This steady increase in invested capital suggests ongoing expansion or increased asset base.
- Economic Spread Ratio
- The economic spread ratio displays considerable variability. It began at 7.02% in 2020, peaking sharply to 19.03% in 2021, which likely contributed to the strong economic profit in that year. Subsequently, it dropped substantially to 3.42% in 2022, sustaining a slight improvement to 3.71% in 2023. By 2024, the ratio increased again to 10.15%, indicating an improved return on invested capital relative to the cost of capital. These fluctuations suggest changes in operational efficiency or cost structure impacting the firm's economic value generation.
Overall, the data highlights a pattern of growth in invested capital coupled with volatile economic profitability and economic spread. The company experienced peak performance in both economic profit and spread ratio in 2021, followed by declines in 2022 and partial recovery in subsequent years. The substantial increase in invested capital indicates capital investment or acquisition activity that may affect future earnings capacity. The economic spread's variability suggests shifts in profitability margins that warrant further investigation to understand underlying causes and sustainability.
Economic Profit Margin
Intuitive Surgical 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 thousands) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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 ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Adjusted Revenue
- There is a consistent upward trend in adjusted revenue over the five-year period. The revenue increased from $4,375,500 thousand in 2020 to $8,383,300 thousand in 2024, nearly doubling. This indicates robust growth in the company’s top-line performance, reflecting expanding sales or market demand.
- Economic Profit
- The economic profit exhibits considerable fluctuation throughout the period. Starting at $314,969 thousand in 2020, it surged significantly to $859,918 thousand in 2021, followed by a sharp decline to $184,573 thousand in 2022. It then recovered gradually to $265,298 thousand in 2023 and rose again substantially to $791,681 thousand in 2024. These variations suggest variability in profitability beyond accounting profits, possibly affected by changes in cost structure, capital charges, or operational efficiency.
- Economic Profit Margin
- The economic profit margin, which measures economic profit relative to revenue, mirrors the volatility seen in economic profit. It rose markedly from 7.2% in 2020 to a peak of 14.98% in 2021, dropped sharply to 2.95% in 2022, then slightly improved to 3.7% in 2023, and further increased to 9.44% in 2024. This fluctuation indicates variations in the company’s ability to convert revenue into economic profit, reflecting substantial changes in underlying economic performance or cost of capital considerations during the period.
- Overall Insights
- The company demonstrates a strong revenue growth trajectory over the five years, indicating successful expansion or market penetration. However, economic profitability shows notable volatility, with peaks in 2021 and 2024 and considerable dips in 2022 and 2023. This pattern may point to challenges in managing economic costs or capital efficiency despite revenue growth. The economic profit margin's variability further confirms that revenue increases do not consistently translate into proportional economic profits, suggesting areas for potential operational or financial improvement.