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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Intuitive Surgical Inc. pages available for free this week:
- Common-Size Balance Sheet: Assets
- 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)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2005
- Return on Equity (ROE) 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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT shows a fluctuating but overall increasing trend from 2020 to 2024. Starting at approximately $1.15 billion in 2020, it peaked at about $1.70 billion in 2021, declined in 2022 to roughly $1.19 billion, then recovered to $1.60 billion in 2023, and reached a new high of $2.24 billion in 2024. This pattern indicates volatility with an overall positive growth trajectory, suggesting improving operating efficiency and profitability towards the later years.
- Cost of Capital
- The cost of capital remains stable and virtually unchanged over the five-year span, consistently around 18.38%. This steady rate implies that the company's risk profile and the market's required return on its invested capital have remained constant, providing a stable benchmark for evaluating economic profitability.
- Invested Capital
- Invested capital exhibits a significant upward trend over the period analyzed. It increases moderately from about $4.49 billion in 2020 to approximately $4.52 billion in 2021, then rises more substantially to roughly $5.40 billion in 2022. This growth accelerates sharply in 2023 and 2024, reaching nearly $7.16 billion and $7.80 billion respectively. This expansion suggests ongoing investment in assets or operations, which could be supporting future growth initiatives.
- Economic Profit
- Economic profit, which accounts for the cost of capital, shows considerable volatility but ends with strong positive growth. After starting at around $325 million in 2020, it spikes to nearly $870 million in 2021, declines sharply in 2022 to about $196 million, then rises moderately to $281 million in 2023 before achieving a substantial increase to approximately $809 million in 2024. This pattern highlights fluctuating value creation relative to the cost of capital but with a notable resurgence in the final year, reflecting improved profitability after covering the cost of invested capital.
Net Operating Profit after Taxes (NOPAT)
Intuitive Surgical Inc., NOPAT calculation
US$ 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 | ||||||
| CVS Health Corp. | ||||||
| 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 data reveals notable fluctuations and trends across the various financial indicators over the analyzed period.
- Economic Profit
- The economic profit demonstrates considerable volatility throughout the years. Initially, there is a substantial increase from 324,811 thousand US dollars in 2020 to a peak of 869,830 thousand US dollars in 2021. This is followed by a significant decline to 196,409 thousand US dollars in 2022, then a moderate recovery to 281,009 thousand US dollars in 2023. The most recent figure in 2024 shows a strong resurgence to 808,793 thousand US dollars, nearly reaching the high levels seen in 2021. This pattern indicates a period of instability with intermittent strong performance.
- Invested Capital
- The invested capital shows a consistent upward trend from 4,486,200 thousand US dollars in 2020 to 7,798,800 thousand US dollars in 2024. This represents a substantial increase in the capital employed in the business, with particularly notable growth between 2022 and 2023. The steady rise in invested capital suggests ongoing expansion or significant reinvestment in the company’s assets over the period.
- Economic Spread Ratio
- The economic spread ratio exhibits significant variability along the timeline. Starting at 7.24% in 2020, it surges to 19.25% in 2021, reflecting heightened profitability relative to invested capital. However, it sharply declines to 3.64% in 2022 and remains low at 3.92% in 2023, indicating reduced efficiency or return on invested capital during these years. The ratio then improves considerably to 10.37% in 2024, suggesting a recovery in profitability and better value creation from the invested capital.
Overall, the financial performance indicates a cycle of sharp increases and decreases in economic profit and economic spread ratio, juxtaposed with a steady and significant increase in invested capital. The trends suggest the company experienced a peak in profitability in 2021, followed by a downturn in subsequent years, and then a strong recovery as of 2024. The rising invested capital underscores ongoing investment activities despite the fluctuations in returns.
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 | ||||||
| CVS Health Corp. | ||||||
| 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
- Adjusted revenue shows a consistent upward trend from 2020 through 2024. It increased from approximately $4.38 billion in 2020 to about $8.38 billion in 2024, nearly doubling over the five-year period. This indicates sustained growth in top-line performance.
- Economic Profit
- Economic profit exhibits considerable volatility over the years. It increased sharply from $324.8 million in 2020 to $869.8 million in 2021, then dropped substantially to $196.4 million in 2022. Subsequent years show a recovery, with economic profit rising to $281.0 million in 2023 and reaching $808.8 million in 2024. This pattern suggests fluctuations in operating efficiency or changes in cost structure alongside revenue growth.
- Economic Profit Margin
- The economic profit margin mirrors the variability in economic profit, although the margin also benefits from the revenue growth over time. The margin increased from 7.42% in 2020 to a peak of 15.15% in 2021, then fell sharply to 3.14% in 2022. It improved slightly to 3.92% in 2023 and rose more substantially to 9.65% in 2024. This indicates that profitability relative to revenue was highest in 2021, experienced a significant decline in the following year, and regained strength by 2024, though not reaching the peak of 2021.
- Overall Insights
- The company demonstrates strong revenue growth throughout the analyzed period, reflecting successful market expansion or increased sales volume. Economic profit and its margin show marked fluctuations, which may be linked to internal operational changes, cost management, or external factors affecting profitability. The recovery observed in economic profit and margin after 2022 suggests effective measures to improve economic value added despite the earlier decline.