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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- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2012
- Price to Earnings (P/E) since 2012
- Price to Book Value (P/BV) since 2012
- Analysis of Debt
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Economic Profit
Meta Platforms 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 data reveals several important trends regarding the company's profitability, capital efficiency, and economic value creation over the observed five-year period.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT shows notable fluctuations, starting at 27,980 million USD in 2020, significantly increasing to 40,147 million USD in 2021. However, it drops sharply to 20,828 million USD in 2022 before recovering strongly in 2023 and reaching a peak of 56,844 million USD in 2024. This indicates periods of volatility but an overall upward trajectory in profitability by the end of the period.
- Cost of Capital
- The cost of capital remains relatively stable, fluctuating slightly between 16.18% and 16.68%. This consistency suggests that the company’s risk profile and capital structure have not undergone significant changes during the period, maintaining a stable hurdle rate for investments.
- Invested Capital
- Invested capital shows a continuous upward trend, increasing each year from 80,951 million USD in 2020 to 165,969 million USD in 2024. The steady investment growth implies ongoing expansion and resource commitment, with the capital nearly doubling over five years.
- Economic Profit
- Economic profit trends largely mirror those of NOPAT, starting at 14,478 million USD in 2020, rising notably to 24,768 million USD in 2021, before a steep decline to 4,364 million USD in 2022. Thereafter, it rebounds to 15,005 million USD in 2023 and further doubles to 29,406 million USD in 2024. This pattern suggests that, despite temporary setbacks, the company has successfully increased value above its cost of capital, with strong economic profit growth in recent years.
Overall, the data indicates that the company experienced significant profitability and value creation challenges around 2022 but demonstrated resilience and capacity for growth in subsequent years. Investments have consistently increased, supporting expanded operations. The stable cost of capital suggests that the underlying financial risk environment remained steady, while economic profit growth highlights improved efficiency in generating returns above capital costs in the latter part of the period.
Net Operating Profit after Taxes (NOPAT)
Meta Platforms 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 deferred revenue.
3 Addition of increase (decrease) in accrued severance and other personnel liabilities.
4 Addition of increase (decrease) in equity equivalents to net income.
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.
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.
- Net Income
- The net income demonstrates variability over the analyzed period. It increased significantly from 29,146 million US dollars in 2020 to 39,370 million US dollars in 2021. However, in 2022, there is a notable decline to 23,200 million US dollars. This downward trend reverses in 2023, with net income rising sharply to 39,098 million US dollars and continuing the upward trajectory to reach 62,360 million US dollars in 2024. Overall, the trend reflects periods of both volatility and robust growth, culminating in a substantial increase by the end of the period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT follows a similar pattern to net income, with an increase from 27,980 million US dollars in 2020 to 40,147 million US dollars in 2021. Subsequently, it decreases to 20,828 million US dollars in 2022, which aligns with the downturn observed in net income for the same year. In 2023, NOPAT recovers significantly to 38,290 million US dollars, and continues to improve, reaching 56,844 million US dollars in 2024. This trend suggests operational profitability experienced fluctuations but ultimately improved substantially by the end of the period, indicating enhanced operational efficiency or favorable business conditions in the latter years.
Cash Operating Taxes
Meta Platforms 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).
- Provision for Income Taxes
- The provision for income taxes exhibited a fluctuating trend over the analyzed periods. It increased significantly from 4,034 million US dollars in 2020 to 7,914 million US dollars in 2021, indicating higher estimated tax obligations. Subsequently, it declined to 5,619 million in 2022, showing a reduction in estimated tax expense. However, the provision rose again to 8,330 million in 2023 and slightly decreased to 8,303 million in 2024, stabilizing at a higher level compared to earlier years. This pattern suggests variability in taxable income or changes in tax regulations impacting the company's tax liabilities.
- Cash Operating Taxes
- Cash operating taxes demonstrated an overall upward trajectory with some volatility. Beginning at 4,959 million US dollars in 2020, the cash taxes paid increased to 7,290 million in 2021. An increase continued in 2022 reaching 8,950 million, followed by a decrease to 8,095 million in 2023. In 2024, cash operating taxes rose sharply to 12,827 million, marking the highest value in the series. The sharp increase in the final period suggests stronger cash outflows related to tax payments, possibly due to tax timing differences, higher taxable income, or changes in tax payment schedules.
- Comparative Observations
- While the provision for income taxes reflects estimated tax expenses, cash operating taxes represent actual cash paid. The data shows instances where cash taxes surpassed the provision, notably in 2022 and 2024, which may point to timing differences or adjustments based on prior estimates. The significant rise in cash operating taxes in 2024 contrasts with the relatively stable provision, highlighting a potential shift in cash tax management or tax obligations becoming due. Overall, the tax-related expenses and payments show variability but an increasing trend, especially on a cash basis, which could affect the company's liquidity and cash flow management.
Invested Capital
Meta Platforms 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 deferred revenue.
4 Addition of accrued severance and other personnel liabilities.
5 Addition of equity equivalents to stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable securities.
The financial data reveals notable trends in the company’s leverage, equity base, and invested capital over the five-year period from 2020 to 2024.
- Total Reported Debt & Leases
- This item exhibits a substantial and accelerating increase over the years. From $11,177 million in 2020, the debt and leases almost doubled by 2022 to $27,278 million and then continued to rise sharply to reach $49,769 million in 2024. This trend indicates a significant expansion in the company's liabilities, suggesting increased borrowing or leasing commitments, which could be aimed at financing growth, acquisitions, or capital expenditures.
- Stockholders’ Equity
- Stockholders' equity shows some fluctuations initially, with a slight decrease from $128,290 million in 2020 to $124,879 million in 2021, then a small rise to $125,713 million in 2022. From 2022 onwards, there is a strong upward trend, culminating in a value of $182,637 million in 2024. This pattern reflects an overall strengthening in the company’s net asset base, which may result from retained earnings growth, successful profitability, or equity issuances.
- Invested Capital
- Invested capital consistently grows over the period, increasing from $80,951 million in 2020 to $165,969 million in 2024. The growth pace accelerates especially after 2021, indicating that the company is increasing its long-term investments and assets base substantially. This could correspond with strategic initiatives to enhance operational capacity, assets acquisition, or overall expansion.
Overall, the data illustrates a company that is increasing its financial leverage considerably while simultaneously growing its equity base and invested capital. This combination may suggest an aggressive growth strategy supported by both debt financing and equity strength, potentially positioning the company for expanded operations or investment in new opportunities. However, the rising debt levels also imply greater financial risk that should be managed carefully.
Cost of Capital
Meta Platforms Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (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 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Meta Platforms 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 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
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 exhibited significant fluctuations over the analyzed period. Initially, there was a strong increase from 14,478 million USD at the end of 2020 to 24,768 million USD by the end of 2021, indicating robust profitability. This was followed by a sharp decline to 4,364 million USD in 2022, reflecting a substantial decrease in profitability that year. Subsequently, economic profit recovered to 15,005 million USD by the end of 2023 and further improved to 29,406 million USD in 2024, suggesting renewed strength in value creation.
- Invested Capital
- The invested capital demonstrated a consistent upward trend throughout the period. Starting at 80,951 million USD in 2020, it rose steadily each year, reaching 92,809 million USD in 2021 and 101,764 million USD in 2022. The increase accelerated in the final two years, with invested capital climbing to 141,324 million USD in 2023 and 165,969 million USD in 2024. This growth indicates ongoing capital deployment and expansion of the asset base.
- Economic Spread Ratio
- The economic spread ratio showed variable performance aligned with fluctuations in economic profit. It peaked at 26.69% in 2021, denoting strong excess returns over cost of capital. This ratio then fell sharply to 4.29% in 2022, mirroring the downturn in economic profit. A recovery phase followed, with the ratio rising to 10.62% by the end of 2023 and further approaching earlier high levels at 17.72% in 2024, suggesting improved efficiency or profitability relative to invested capital.
- Overall Analysis
- The data reveals a period marked by significant volatility in profitability, with economic profit and spread ratio both experiencing highs and lows, while invested capital consistently increased. The pattern suggests that despite temporary profit contractions, the company continued to invest considerably, and profitability metrics indicated recovery and strengthening by the end of the period. This dynamic may reflect strategic investment cycles or market fluctuations impacting returns on invested capital.
Economic Profit Margin
Meta Platforms 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 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk Inc. | ||||||
| Walt Disney Co. | ||||||
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.
- Economic Profit
- The economic profit exhibited significant fluctuation over the analyzed period. Starting at 14,478 million USD in 2020, it increased sharply to 24,768 million USD in 2021. However, there was a pronounced decline in 2022, dropping to 4,364 million USD. This was followed by a recovery in 2023, reaching 15,005 million USD, and a substantial rise in 2024 to 29,406 million USD. The data indicates periods of volatility with a strong upward momentum in the latter years.
- Adjusted Revenue
- Adjusted revenue showed overall growth throughout the period. In 2020, revenue was 86,066 million USD, with a notable increase to 118,154 million USD in 2021. Although revenue slightly decreased in 2022 to 116,539 million USD, it resumed growth in subsequent years, reaching 135,051 million USD in 2023 and advancing further to 164,598 million USD in 2024. The trend reflects a generally positive revenue trajectory despite a minor setback in 2022.
- Economic Profit Margin
- The economic profit margin demonstrated considerable variation analogous to economic profit trends. Beginning at 16.82% in 2020, it increased to a peak of 20.96% in 2021. A sharp decline followed in 2022, dropping to 3.74%, indicating lower profitability relative to revenue that year. Margin improvement was evident in 2023, rising to 11.11%, and continued upward to 17.87% in 2024. This suggests a restoration of profit efficiency after the downturn.
- Summary of Trends
- Overall, the financial data reveals a pattern of recovery and growth after experiencing a dip in 2022. Both economic profit and its margin were significantly impacted in that year but showed strong rebounds in subsequent periods. Adjusted revenue maintained a generally upward course with a slight interruption in 2022. The combined analysis points to resilience in earnings quality and business performance, culminating in improved profitability and revenue by 2024.