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:
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) 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 financial performance, as measured by economic profit, demonstrates considerable fluctuation over the five-year period. Net operating profit after taxes (NOPAT) and invested capital both generally increased, but economic profit exhibited volatility, peaking in 2021 before declining and then rising again in 2024. The cost of capital remained constant throughout the period.
- NOPAT Trend
- Net operating profit after taxes increased from US$1,149,207 thousand in 2020 to US$1,700,018 thousand in 2021, representing a substantial gain. A decrease was then observed in 2022, falling to US$1,187,823 thousand, followed by a rise to US$1,596,933 thousand in 2023. The most recent year, 2024, shows the highest NOPAT value at US$2,242,154 thousand.
- Invested Capital Trend
- Invested capital experienced a modest increase from US$4,486,200 thousand in 2020 to US$4,517,800 thousand in 2021. A more significant increase occurred between 2021 and 2022, reaching US$5,396,200 thousand. Further growth was seen in 2023 (US$7,159,800 thousand) and 2024 (US$7,798,800 thousand), indicating a consistent, though accelerating, expansion of capital employed.
- Economic Profit Analysis
- Economic profit reached its highest point in 2021 at US$842,097 thousand. This was preceded by US$297,273 thousand in 2020. A substantial decline was noted in 2022, with economic profit falling to US$163,293 thousand. It recovered somewhat in 2023 to US$237,051 thousand, and then experienced a significant increase in 2024, reaching US$760,914 thousand. The fluctuations in economic profit suggest that while NOPAT and invested capital generally grew, the relationship between profitability and capital employed varied considerably year to year.
The consistent cost of capital suggests that changes in economic profit are primarily driven by variations in NOPAT and invested capital. The strong performance in 2021 and 2024, as indicated by economic profit, suggests periods of efficient capital allocation and strong operational profitability. The dip in 2022 warrants further investigation to understand the underlying causes of the reduced economic profit despite continued growth in NOPAT and invested capital.
Net Operating Profit after Taxes (NOPAT)
Intuitive Surgical Inc., NOPAT calculation
US$ 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 | ||||||
| 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 economic spread ratio demonstrates considerable fluctuation over the five-year period. Initial values indicate a strong performance, followed by a significant decline, and a subsequent recovery culminating in a substantial increase.
- Economic Spread Ratio - Trend Analysis
- In 2020, the economic spread ratio stood at 6.63%. This value increased markedly in 2021, reaching 18.64%, representing a period of significantly enhanced profitability relative to invested capital. However, a substantial decrease was observed in 2022, with the ratio falling to 3.03%. This decline continued, albeit at a slower pace, in 2023, where the ratio registered at 3.31%. A strong upward trend then emerged in 2024, with the economic spread ratio increasing to 9.76%, indicating a renewed improvement in the relationship between economic profit and invested capital.
The invested capital consistently increased throughout the period, moving from US$4,486,200 thousand in 2020 to US$7,798,800 thousand in 2024. This growth in invested capital did not consistently translate into proportional increases in economic profit, as evidenced by the fluctuations in the economic spread ratio.
- Economic Profit and Invested Capital Relationship
- While economic profit experienced growth from 2020 to 2021, it decreased in 2022 before recovering in 2023 and showing substantial growth in 2024. The economic spread ratio’s volatility suggests that the efficiency with which invested capital generated economic profit varied considerably year-to-year. The significant increase in the ratio in 2024, alongside the continued growth in invested capital and economic profit, suggests improved capital allocation and/or operational efficiency during that year.
The observed pattern suggests a dynamic relationship between capital deployment and profitability. Further investigation into the factors driving these fluctuations, such as changes in operational efficiency, market conditions, or investment strategies, would be beneficial.
Economic Profit Margin
Intuitive Surgical Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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.
The economic profit margin exhibited considerable fluctuation between 2020 and 2024. Initial values demonstrated growth, followed by a significant decline, and then a substantial recovery. A detailed examination of the trends is presented below.
- Economic Profit Margin Trend
- In 2020, the economic profit margin stood at 6.79%. This value increased substantially to 14.67% in 2021, representing a period of significant improvement in profitability relative to adjusted revenue. However, 2022 witnessed a marked decrease, with the margin falling to 2.61%. A modest recovery occurred in 2023, with the margin reaching 3.30%. The most recent year, 2024, showed a strong resurgence, with the economic profit margin climbing to 9.08%, indicating a return to levels approaching those seen in 2021.
- Relationship to Adjusted Revenue
- The economic profit margin’s fluctuations appear to be influenced by both changes in economic profit and adjusted revenue. While adjusted revenue consistently increased throughout the period, the economic profit did not follow a linear trajectory. The substantial increase in the margin from 2020 to 2021 was driven by a larger percentage increase in economic profit compared to adjusted revenue. Conversely, the decline in 2022 was attributable to a disproportionately larger increase in adjusted revenue relative to economic profit. The recovery in 2024 was supported by a significant increase in economic profit alongside continued growth in adjusted revenue.
Overall, the economic profit margin demonstrates a volatile pattern over the five-year period. The substantial improvement in 2024 suggests a strengthening of the relationship between revenue generation and economic profitability, but the prior fluctuations warrant continued monitoring to understand the underlying drivers of these changes.