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.
Economic Profit
Micron Technology Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 8,713 – 19.99% × 61,173 = -3,517
The analysis of economic value added indicates that the organization has consistently failed to generate a positive economic profit over the six-year period from 2020 to 2025. Despite significant fluctuations in operating profitability, the returns have remained insufficient to cover the cost of the capital employed.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited extreme volatility. An initial growth phase was observed from 2020 to 2022, with values increasing from 2,891 million to a peak of 9,071 million. This was followed by a severe collapse in 2023, where NOPAT dropped to -5,885 million. A subsequent recovery period occurred through 2024 and 2025, with the latter year seeing a return to profitability at 8,713 million.
- Invested Capital and Cost of Capital
- Invested capital followed a consistent upward trajectory, expanding from 42,291 million in 2020 to 61,173 million by 2025. This expansion occurred despite the volatility in operating profits. Concurrently, the cost of capital remained relatively stable and high, fluctuating within a narrow range between 18.61% and 19.99%.
- Economic Profit Trends
- Economic profit remained negative throughout the entire period, signaling continuous destruction of shareholder value. While there was a trend toward improvement between 2020 and 2022—where losses narrowed from -5,085 million to -1,041 million—the 2023 downturn resulted in a peak deficit of -15,836 million. Although losses have been reducing in 2024 and 2025, the economic profit remains negative at -3,517 million as of August 2025.
- Value Creation Synthesis
- The persistence of negative economic profit is driven by a combination of a high cost of capital (averaging approximately 19%) and a growing capital base. The operating returns, even during peak years, have not reached the threshold required to offset the capital charge. The capital-intensive nature of the expansion, paired with high hurdle rates, has hindered the transition to positive economic value added.
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Net Operating Profit after Taxes (NOPAT)
Micron Technology Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Micron.
3 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 775 × 4.26% = 33
4 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 510 × 21.00% = 107
5 Addition of after taxes interest expense to net income (loss) attributable to Micron.
6 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 497 × 21.00% = 104
7 Elimination of after taxes investment income.
- Net Income (Loss) Attributable to Micron
- The net income exhibited significant fluctuations over the observed periods. Starting from a positive value of 2,687 million USD in 2020, there was a substantial increase to 5,861 million USD in 2021, followed by a further rise to 8,687 million USD in 2022. However, the year 2023 saw a marked reversal with a net loss of 5,833 million USD. Subsequently, the net income rebounded in 2024 to a positive 778 million USD and further increased to 8,539 million USD in 2025. This pattern highlights considerable volatility in profitability, with a notable dip in 2023 amidst an overall upward trajectory in net income.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT reflected a trend similar to net income, indicating a strong correlation between operating profitability and net earnings. The figure rose steadily from 2,891 million USD in 2020 to 5,967 million USD in 2021 and reached a peak of 9,071 million USD in 2022. A sharp decline occurred in 2023, with NOPAT turning negative at -5,885 million USD. Recovery ensued in 2024 with a modest positive value of 857 million USD and a significant improvement to 8,713 million USD in 2025. This indicates that operating efficiency and after-tax operating profits experienced a disruption in 2023 but resumed a positive and robust recovery in the subsequent years.
- Overall Trends and Insights
- Both net income and NOPAT demonstrated robust growth through 2022, followed by a critical downturn in 2023. The sharp declines in 2023 suggest an extraordinary or challenging event impacting profitability and operational effectiveness during that year. The recovery in 2024 and strong performance in 2025 reflect resilience and an effective restoration of earnings capacity. The data suggests that despite volatility, the company managed to return to a growth trajectory in profitability in the most recent period.
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Cash Operating Taxes
Micron Technology Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
- Income Tax Provision
- Over the examined periods, the income tax provision exhibits considerable volatility. Starting at 280 million USD in 2020, it rose significantly to 394 million USD in 2021. The figure then more than doubled to 888 million USD in 2022, indicating a substantial increase in tax expenses or taxable income during that year. However, in 2023, the income tax provision sharply declined to 177 million USD, the lowest in the observed timeframe. It then rebounded to 451 million USD in 2024 and reached a peak of 1,124 million USD in 2025, marking the highest level recorded. This pattern suggests fluctuations in profitability or changes in tax strategy, with a notable upward trend towards the latter periods.
- Cash Operating Taxes
- Cash operating taxes demonstrate a parallel yet slightly less volatile pattern compared to the income tax provision. Beginning at 189 million USD in 2020, the amount increased to 446 million USD in 2021 and further rose to 618 million USD in 2022. A significant decline occurred in 2023, where the cash operating taxes dropped to 172 million USD, closely mirroring the income tax provision trend. Following this low point, there was a recovery to 428 million USD in 2024, and a substantial increase to 963 million USD in 2025. The overall trajectory shows growth in cash taxes paid, with a notable dip in 2023, suggesting changes in operating income or tax payments timing.
- Comparative Analysis
- Both income tax provision and cash operating taxes reveal correlated fluctuations across the years, with peaks in 2022 and 2025 and a pronounced trough in 2023. The income tax provision consistently exceeds cash operating taxes, indicating differences likely due to deferred tax adjustments or non-cash tax expenses. The sharp variations imply that fiscal results and tax obligations experienced significant shifts over the period, possibly impacted by changes in earnings, tax legislation, or accounting practices.
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Invested Capital
Micron Technology Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of equity equivalents to shareholders’ equity.
4 Removal of accumulated other comprehensive income.
5 Subtraction of construction in progress.
6 Subtraction of marketable debt investments.
- Total Reported Debt & Leases
- The total reported debt and leases demonstrate a fluctuating upward trend over the analyzed periods. Initially, the amount increased slightly from 7,230 million USD in 2020 to 7,576 million USD in 2022. A significant rise occurred between 2022 and 2023, with the value nearly doubling to 13,999 million USD. This elevated level of debt and leases was sustained through 2024 and increased further to 15,352 million USD in 2025, indicating an increasing reliance on debt financing in recent years.
- Shareholders’ Equity
- Shareholders’ equity generally exhibited growth over the reported timeframe, rising from 38,996 million USD in 2020 to a peak of 49,907 million USD in 2022. However, in 2023, equity declined to 44,120 million USD before resuming an upward trend, reaching 54,165 million USD in 2025. This pattern suggests some volatility, but a longer-term positive increase in equity base is evident by the end of the period.
- Invested Capital
- Invested capital shows an overall growth trend, moving from 42,291 million USD in 2020 to 61,173 million USD in 2025. The increase appears steady, with minor fluctuations around 2023 and 2024 when the invested capital plateaued near 53,000 million USD before rising again. This reflects a consistent expansion in the company's total capital commitment over the examined years.
- General Insights
- The data indicates that the company has been increasing its use of debt and leases substantially since 2022, which has contributed to rising invested capital. Despite some fluctuations in shareholders’ equity, the overall capital structure suggests growth and increased financial leverage. The simultaneous growth in both equity and debt levels points to an expansion strategy that involves utilizing both internal funds and external borrowings.
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Cost of Capital
Micron Technology Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 210,833) | 210,833) | ÷ | 226,222) | = | 0.93 | 0.93 | × | 21.15% | = | 19.71% | ||
| Debt3 | 14,614) | 14,614) | ÷ | 226,222) | = | 0.06 | 0.06 | × | 5.29% × (1 – 21.00%) | = | 0.27% | ||
| Operating lease liability4 | 775) | 775) | ÷ | 226,222) | = | 0.00 | 0.00 | × | 4.26% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 226,222) | 1.00 | 19.99% | ||||||||||
Based on: 10-K (reporting date: 2025-08-28).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 113,369) | 113,369) | ÷ | 127,420) | = | 0.89 | 0.89 | × | 21.15% | = | 18.82% | ||
| Debt3 | 13,370) | 13,370) | ÷ | 127,420) | = | 0.10 | 0.10 | × | 5.29% × (1 – 21.00%) | = | 0.44% | ||
| Operating lease liability4 | 681) | 681) | ÷ | 127,420) | = | 0.01 | 0.01 | × | 3.42% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 127,420) | 1.00 | 19.27% | ||||||||||
Based on: 10-K (reporting date: 2024-08-29).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 76,818) | 76,818) | ÷ | 90,317) | = | 0.85 | 0.85 | × | 21.15% | = | 17.99% | ||
| Debt3 | 12,830) | 12,830) | ÷ | 90,317) | = | 0.14 | 0.14 | × | 5.37% × (1 – 21.00%) | = | 0.60% | ||
| Operating lease liability4 | 669) | 669) | ÷ | 90,317) | = | 0.01 | 0.01 | × | 3.21% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 90,317) | 1.00 | 18.61% | ||||||||||
Based on: 10-K (reporting date: 2023-08-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 57,522) | 57,522) | ÷ | 64,550) | = | 0.89 | 0.89 | × | 21.15% | = | 18.85% | ||
| Debt3 | 6,358) | 6,358) | ÷ | 64,550) | = | 0.10 | 0.10 | × | 3.87% × (1 – 21.00%) | = | 0.30% | ||
| Operating lease liability4 | 670) | 670) | ÷ | 64,550) | = | 0.01 | 0.01 | × | 2.90% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 64,550) | 1.00 | 19.17% | ||||||||||
Based on: 10-K (reporting date: 2022-09-01).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 78,438) | 78,438) | ÷ | 86,384) | = | 0.91 | 0.91 | × | 21.15% | = | 19.20% | ||
| Debt3 | 7,387) | 7,387) | ÷ | 86,384) | = | 0.09 | 0.09 | × | 3.54% × (1 – 21.00%) | = | 0.24% | ||
| Operating lease liability4 | 559) | 559) | ÷ | 86,384) | = | 0.01 | 0.01 | × | 2.63% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 86,384) | 1.00 | 19.46% | ||||||||||
Based on: 10-K (reporting date: 2021-09-02).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 58,589) | 58,589) | ÷ | 67,006) | = | 0.87 | 0.87 | × | 21.15% | = | 18.49% | ||
| Debt3 | 7,830) | 7,830) | ÷ | 67,006) | = | 0.12 | 0.12 | × | 3.78% × (1 – 21.00%) | = | 0.35% | ||
| Operating lease liability4 | 587) | 587) | ÷ | 67,006) | = | 0.01 | 0.01 | × | 2.67% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 67,006) | 1.00 | 18.86% | ||||||||||
Based on: 10-K (reporting date: 2020-09-03).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Micron Technology Inc., economic spread ratio calculation, comparison to benchmarks
| Aug 28, 2025 | Aug 29, 2024 | Aug 31, 2023 | Sep 1, 2022 | Sep 2, 2021 | Sep 3, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (3,517) | (9,419) | (15,836) | (1,041) | (3,050) | (5,085) | |
| Invested capital2 | 61,173) | 53,327) | 53,467) | 52,741) | 46,342) | 42,291) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -5.75% | -17.66% | -29.62% | -1.97% | -6.58% | -12.02% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.11% | -27.37% | -28.80% | -28.42% | 28.16% | — | |
| Analog Devices Inc. | -12.03% | -14.15% | -10.06% | -11.43% | -14.67% | -9.61% | |
| Applied Materials Inc. | 17.27% | 10.37% | 13.36% | 23.33% | 18.82% | 7.16% | |
| Broadcom Inc. | -2.94% | -10.36% | 4.87% | 3.61% | -5.62% | -10.85% | |
| Intel Corp. | -18.62% | -29.96% | -19.83% | -13.05% | 3.54% | — | |
| KLA Corp. | 20.58% | 16.23% | 20.17% | 22.57% | 11.03% | — | |
| Lam Research Corp. | 12.15% | -2.98% | 2.38% | 17.40% | 12.74% | — | |
| Marvell Technology Inc. | -26.42% | -26.46% | -22.13% | -24.89% | -26.61% | — | |
| NVIDIA Corp. | 117.48% | 62.03% | -16.05% | 26.14% | 6.62% | — | |
| Qualcomm Inc. | 12.49% | 7.70% | 0.23% | 26.66% | 24.06% | 9.13% | |
| Texas Instruments Inc. | 2.39% | 2.70% | 12.32% | 32.90% | 31.54% | — | |
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,517 ÷ 61,173 = -5.75%
4 Click competitor name to see calculations.
The analysis of economic value added indicates a period of consistent value destruction, as economic profit remained negative throughout the observed timeframe from September 2020 to August 2025. Despite fluctuations in the magnitude of losses, the company failed to generate returns in excess of its cost of capital during this entire period.
- Economic Spread Ratio Volatility
- The economic spread ratio exhibited significant volatility, starting at -12.02% in 2020 and improving steadily to -1.97% by 2022. A severe contraction occurred in 2023, where the ratio plummeted to -29.62%, marking the period of lowest capital efficiency. A recovery trend followed, with the ratio improving to -17.66% in 2024 and reaching -5.75% by August 2025.
- Invested Capital Expansion
- Invested capital demonstrated a consistent upward trajectory, increasing from 42,291 million USD in 2020 to 61,173 million USD by 2025. This growth in the capital base suggests a sustained increase in asset deployment, which simultaneously heightened the financial hurdle required to achieve a positive economic profit.
- Economic Profit Trends
- Economic profit followed a non-linear pattern, moving from an initial loss of 5,085 million USD in 2020 toward a reduced loss of 1,041 million USD in 2022. This trend was sharply reversed in 2023, resulting in a peak loss of 15,836 million USD. Subsequent periods show a recovery, with losses narrowing to 9,419 million USD in 2024 and further to 3,517 million USD in 2025.
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Economic Profit Margin
Micron Technology Inc., economic profit margin calculation, comparison to benchmarks
| Aug 28, 2025 | Aug 29, 2024 | Aug 31, 2023 | Sep 1, 2022 | Sep 2, 2021 | Sep 3, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (3,517) | (9,419) | (15,836) | (1,041) | (3,050) | (5,085) | |
| Revenue | 37,378) | 25,111) | 15,540) | 30,758) | 27,705) | 21,435) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -9.41% | -37.51% | -101.90% | -3.38% | -11.01% | -23.72% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -37.61% | -61.81% | -73.50% | -70.47% | 10.61% | — | |
| Analog Devices Inc. | -45.93% | -65.34% | -36.13% | -42.83% | -94.24% | -31.23% | |
| Applied Materials Inc. | 12.25% | 7.22% | 8.96% | 13.47% | 12.01% | 5.45% | |
| Broadcom Inc. | -6.91% | -28.32% | 8.52% | 6.76% | -13.24% | -29.94% | |
| Intel Corp. | -41.07% | -52.08% | -33.68% | -18.36% | 3.97% | — | |
| KLA Corp. | 15.74% | 13.93% | 16.02% | 19.08% | 10.87% | — | |
| Lam Research Corp. | 10.15% | -3.02% | 2.09% | 12.85% | 10.28% | — | |
| Marvell Technology Inc. | -81.64% | -91.49% | -74.77% | -111.07% | -81.68% | — | |
| NVIDIA Corp. | 42.55% | 31.32% | -12.70% | 17.52% | 5.17% | — | |
| Qualcomm Inc. | 8.83% | 6.10% | 0.20% | 17.76% | 14.49% | 6.89% | |
| Texas Instruments Inc. | 3.86% | 4.52% | 15.89% | 28.85% | 28.21% | — | |
Based on: 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × -3,517 ÷ 37,378 = -9.41%
3 Click competitor name to see calculations.
The analysis of economic value added reveals a consistent trend of negative economic profit from 2020 through 2025, indicating that the organization failed to generate returns exceeding its cost of capital throughout the analyzed period. While the magnitude of value destruction varied significantly, the trajectory is characterized by an initial improvement, a severe collapse in 2023, and a subsequent recovery phase.
- Economic Profit Volatility
- Economic profit demonstrated a narrowing deficit between 2020 and 2022, moving from -5,085 million to -1,041 million. This trend was abruptly reversed in 2023, where economic profit plummeted to a period low of -15,836 million. A recovery trend followed in the subsequent years, with losses reducing to -9,419 million in 2024 and further improving to -3,517 million by 2025.
- Revenue Influence
- Revenue patterns align closely with the fluctuations in economic profit. Revenue increased steadily from 2020 to 2022, peaking at 30,758 million, before experiencing a sharp contraction to 15,540 million in 2023. The subsequent rebound in revenue, reaching a period high of 37,378 million in 2025, served as a primary driver in mitigating the economic profit deficit.
- Economic Profit Margin Performance
- The economic profit margin exhibited extreme variance, mirroring the volatility of the underlying financial figures. The margin improved from -23.72% in 2020 to a near-breakeven point of -3.38% in 2022. A critical decline occurred in 2023, with the margin dropping to -101.90%, signifying that economic losses exceeded total revenue. Since that trough, the margin has recovered significantly, reaching -9.41% by 2025, indicating a progressive shift toward potential value creation.
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