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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.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Meta Platforms Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	38,290)	20,828)	40,147)	27,980)	18,109)
Cost of capital²	14.56%	14.30%	14.64%	14.73%	14.69%
Invested capital³	141,324)	101,764)	92,809)	80,951)	65,543)

Economic profit⁴	17,713)	6,273)	26,562)	16,054)	8,477)

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 38,290 – 14.56% × 141,324 = 17,713

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Meta Platforms Inc. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Meta Platforms Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	39,098)	23,200)	39,370)	29,146)	18,485)
Deferred income tax expense (benefit)¹	131)	(3,277)	609)	(997)	(40)
Increase (decrease) in deferred revenue²	149)	(70)	225)	101)	117)
Increase (decrease) in accrued severance and other personnel liabilities³	(696)	772)	—)	—)	—)
Increase (decrease) in equity equivalents⁴	(416)	(2,575)	834)	(896)	77)
Interest expense	446)	176)	15)	14)	20)
Interest expense, operating lease liability⁵	697)	533)	388)	330)	330)
Adjusted interest expense	1,143)	709)	403)	344)	350)
Tax benefit of interest expense⁶	(240)	(149)	(85)	(72)	(74)
Adjusted interest expense, after taxes⁷	903)	560)	319)	272)	277)
Interest income	(1,639)	(452)	(476)	(686)	(924)
Investment income, before taxes	(1,639)	(452)	(476)	(686)	(924)
Tax expense (benefit) of investment income⁸	344)	95)	100)	144)	194)
Investment income, after taxes⁹	(1,295)	(357)	(376)	(542)	(730)
Net operating profit after taxes (NOPAT)	38,290)	20,828)	40,147)	27,980)	18,109)

Based on: 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), 10-K (reporting date: 2019-12-31).

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 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 18,849 × 3.70% = 697

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,143 × 21.00% = 240

⁷ Addition of after taxes interest expense to net income.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,639 × 21.00% = 344

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Meta Platforms Inc. NOPAT decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Meta Platforms Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Provision for income taxes	8,330)	5,619)	7,914)	4,034)	6,327)
Less: Deferred income tax expense (benefit)	131)	(3,277)	609)	(997)	(40)
Add: Tax savings from interest expense	240)	149)	85)	72)	74)
Less: Tax imposed on investment income	344)	95)	100)	144)	194)
Cash operating taxes	8,095)	8,950)	7,290)	4,959)	6,247)

Based on: 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), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Meta Platforms Inc. cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Meta Platforms Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Finance lease liabilities, current	90)	129)	75)	54)	55)
Long-term debt	18,385)	9,923)	—)	—)	—)
Finance lease liabilities, non-current	600)	558)	506)	469)	418)
Operating lease liability¹	18,849)	16,668)	13,873)	10,654)	10,324)
Total reported debt & leases	37,924)	27,278)	14,454)	11,177)	10,797)
Stockholders’ equity	153,168)	125,713)	124,879)	128,290)	101,054)
Net deferred tax (assets) liabilities²	(4,864)	(4,946)	(1,729)	(2,258)	(1,156)
Deferred revenue³	675)	526)	596)	335)	234)
Accrued severance and other personnel liabilities⁴	76)	772)	—)	—)	—)
Equity equivalents⁵	(4,113)	(3,648)	(1,133)	(1,923)	(922)
Accumulated other comprehensive (income) loss, net of tax⁶	2,155)	3,530)	693)	(927)	489)
Adjusted stockholders’ equity	151,210)	125,595)	124,439)	125,440)	100,621)
Construction in progress⁷	(24,269)	(25,052)	(14,687)	(11,288)	(10,099)
Marketable securities⁸	(23,541)	(26,057)	(31,397)	(44,378)	(35,776)
Invested capital	141,324)	101,764)	92,809)	80,951)	65,543)

Based on: 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), 10-K (reporting date: 2019-12-31).

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.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Meta Platforms Inc. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Meta Platforms Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,210,942)	1,210,942)	÷	1,248,961)	=	0.97	0.97	×	14.91%	=	14.46%
Long-term debt and finance lease liabilities³	19,170)	19,170)	÷	1,248,961)	=	0.02	0.02	×	4.61% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	18,849)	18,849)	÷	1,248,961)	=	0.02	0.02	×	3.70% × (1 – 21.00%)	=	0.04%
Total:	1,248,961)					1.00					14.56%

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 »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	489,413)	489,413)	÷	515,398)	=	0.95	0.95	×	14.91%	=	14.16%
Long-term debt and finance lease liabilities³	9,317)	9,317)	÷	515,398)	=	0.02	0.02	×	4.06% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	16,668)	16,668)	÷	515,398)	=	0.03	0.03	×	3.20% × (1 – 21.00%)	=	0.08%
Total:	515,398)					1.00					14.30%

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 »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	647,169)	647,169)	÷	661,623)	=	0.98	0.98	×	14.91%	=	14.59%
Long-term debt and finance lease liabilities³	581)	581)	÷	661,623)	=	0.00	0.00	×	2.70% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	13,873)	13,873)	÷	661,623)	=	0.02	0.02	×	2.80% × (1 – 21.00%)	=	0.05%
Total:	661,623)					1.00					14.64%

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 »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	754,633)	754,633)	÷	765,810)	=	0.99	0.99	×	14.91%	=	14.70%
Long-term debt and finance lease liabilities³	523)	523)	÷	765,810)	=	0.00	0.00	×	2.90% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	10,654)	10,654)	÷	765,810)	=	0.01	0.01	×	3.10% × (1 – 21.00%)	=	0.03%
Total:	765,810)					1.00					14.73%

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 »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	597,255)	597,255)	÷	608,052)	=	0.98	0.98	×	14.91%	=	14.65%
Long-term debt and finance lease liabilities³	473)	473)	÷	608,052)	=	0.00	0.00	×	3.10% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	10,324)	10,324)	÷	608,052)	=	0.02	0.02	×	3.20% × (1 – 21.00%)	=	0.04%
Total:	608,052)					1.00					14.69%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Meta Platforms Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	17,713)	6,273)	26,562)	16,054)	8,477)
Invested capital²	141,324)	101,764)	92,809)	80,951)	65,543)
Performance Ratio
Economic spread ratio³	12.53%	6.16%	28.62%	19.83%	12.93%
Benchmarks
Economic Spread Ratio, Competitors⁴
Alphabet Inc.	19.19%	16.09%	38.38%	19.62%	18.68%
Comcast Corp.	-2.25%	-6.72%	-1.69%	-3.35%	-1.30%
Netflix Inc.	0.36%	-0.91%	3.41%	-1.98%	-3.80%
Walt Disney Co.	-11.30%	-9.17%	-11.94%	-14.23%	-4.03%

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 17,713 ÷ 141,324 = 12.53%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Meta Platforms Inc. economic spread ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Meta Platforms Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	17,713)	6,273)	26,562)	16,054)	8,477)

Revenue	134,902)	116,609)	117,929)	85,965)	70,697)
Add: Increase (decrease) in deferred revenue	149)	(70)	225)	101)	117)
Adjusted revenue	135,051)	116,539)	118,154)	86,066)	70,814)
Performance Ratio
Economic profit margin²	13.12%	5.38%	22.48%	18.65%	11.97%
Benchmarks
Economic Profit Margin, Competitors³
Alphabet Inc.	11.82%	9.92%	22.02%	13.14%	11.59%
Comcast Corp.	-3.89%	-11.89%	-3.33%	-7.24%	-2.59%
Netflix Inc.	0.41%	-1.09%	3.98%	-2.34%	-4.52%
Walt Disney Co.	-22.07%	-18.87%	-30.44%	-38.27%	-9.63%

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × 17,713 ÷ 135,051 = 13.12%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Meta Platforms Inc. economic profit margin deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Meta Platforms Inc. (NASDAQ:META)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin