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
Moderna Inc., economic profit calculation
US$ in millions
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
= -5,414 – 25.26% × 5,263 = -6,744
The analysis of economic profit reveals a period of extreme volatility characterized by a rapid ascent to peak value creation followed by a significant contraction. The financial trajectory from 2019 to 2023 demonstrates a cycle of aggressive expansion and subsequent correction in operating performance.
- Net Operating Profit After Taxes (NOPAT)
- A dramatic shift in operating profitability is observed, with NOPAT moving from a loss of 605 million USD in 2019 to a peak of 14,737 million USD in 2021. This peak was followed by a sharp decline, resulting in a negative NOPAT of 5,414 million USD by the end of 2023.
- Invested Capital
- Invested capital experienced rapid growth, increasing from 481 million USD in 2019 to a maximum of 10,693 million USD in 2021. From 2022 onward, a steady reduction in invested capital is evident, descending to 5,263 million USD in 2023.
- Cost of Capital
- The cost of capital remained remarkably stable throughout the five-year period, fluctuating minimally between a high of 25.89% in 2020 and a low of 25.26% in 2023. This indicates a consistent required rate of return despite the high volatility in operating results.
- Economic Profit
- Economic profit closely mirrored the volatility of NOPAT, transitioning from a deficit of 729 million USD in 2019 to a substantial surplus of 11,998 million USD in 2021. However, this trend reversed sharply, culminating in an economic loss of 6,744 million USD in 2023, indicating that the returns on invested capital failed to meet the cost of capital during the final observed year.
Overall, the data indicates that while the organization generated immense economic value during the 2020-2021 period, the sustainability of those gains was not maintained. The transition to a significant economic loss in 2023 suggests a substantial misalignment between the current operating profit and the capital costs associated with the business operations.
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Net Operating Profit after Taxes (NOPAT)
Moderna Inc., NOPAT calculation
US$ in millions
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 wholesalers chargebacks, discounts and fees.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income (loss).
5 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 668 × 7.50% = 50
6 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 88 × 21.00% = 19
7 Addition of after taxes interest expense to net income (loss).
8 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 383 × 21.00% = 80
9 Elimination of after taxes investment income.
The financial data reveals significant fluctuations in the company's profitability over the five-year period. The net income (loss) experienced a substantial improvement from 2019 to 2021, transitioning from negative figures in 2019 and 2020 to a strong positive net income in 2021. This peak was followed by a decline in 2022 and a return to negative net income in 2023.
Similarly, the net operating profit after taxes (NOPAT) reflects this volatility. In 2019, the NOPAT was negative but shifted to a positive value in 2020, with a remarkable increase reaching its highest point in 2021. After peaking, there was a steep decline in 2022 and further deterioration in 2023, resulting in negative NOPAT.
- Net Income (Loss) Trend
- From a loss of $514 million in 2019 worsening to a loss of $747 million in 2020, the company reversed its fortunes dramatically in 2021, generating a net income of $12,202 million. This profit decreased to $8,362 million in 2022 and swung back to a loss of $4,714 million in 2023.
- Net Operating Profit After Taxes (NOPAT) Trend
- Consistent with net income, NOPAT started negative at -$605 million in 2019, rose sharply to $3,091 million in 2020, then peaked at $14,737 million in 2021. The metric then declined to $3,520 million in 2022 and further dropped to -$5,414 million by 2023, displaying high volatility and indicating challenges in operational profitability towards the end of the period.
- Overall Insight
- The data demonstrates a peak in financial performance in 2021, followed by notable declines in subsequent years. The sharp swings between profit and loss suggest potential external or internal factors influencing operational efficiency and market conditions. The negative results in 2023 highlight recent financial challenges and may warrant further investigation into cost structures, revenue streams, or market dynamics.
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Cash Operating Taxes
Moderna Inc., cash operating taxes calculation
US$ in millions
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).
The financial data exhibits notable fluctuations in the provision for income taxes as well as cash operating taxes over the five-year period.
- Provision for (benefit from) income taxes
-
There is a clear upward trend from 2019 through 2022, starting with a benefit of US$ -1 million in 2019, rising to a modest provision of US$ 3 million in 2020, and then surging significantly to US$ 1,083 million in 2021 and further to US$ 1,213 million in 2022. However, in 2023, the provision decreased to US$ 772 million, indicating a partial reversal from the previous two years but still remaining at a substantially higher level than in 2019 and 2020.
- Cash operating taxes
-
The cash operating taxes similarly show variability with a negative outflow of US$ -4 million in 2019, followed by a small positive figure of US$ 1 million in 2020. Thereafter, there is a sharp increase to US$ 1,381 million in 2021 and US$ 1,763 million in 2022, mirroring the upward trend seen in the provision for income taxes. Notably, in 2023 the cash operating taxes turn negative again at US$ -191 million, which contrasts starkly with the two previous years and suggests unusual tax-related cash flows or adjustments.
Overall, both provisions for income taxes and cash operating taxes remain low in the initial years before escalating steeply during 2021 and 2022, likely reflecting increased taxable income or changes in tax rates or rules during that period. The drop in 2023 for both measures, especially the negative cash operating taxes, may warrant further investigation as it suggests atypical tax events or benefits impacting cash flows.
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Invested Capital
Moderna Inc., invested capital calculation (financing approach)
US$ in millions
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 allowance for doubtful accounts receivable.
4 Addition of deferred revenue.
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 over the five-year period exhibit notable fluctuations in the key metrics of total reported debt and leases, stockholders' equity, and invested capital.
- Total Reported Debt & Leases
- The total reported debt and leases increased consistently each year from 2019 to 2023. Starting at US$136 million in 2019, it rose sharply to US$238 million in 2020 and then accelerated to US$916 million in 2021. The upward trend continued but at a moderated pace with values reaching US$1,200 million in 2022 and US$1,243 million in 2023. This pattern suggests a notable increase in leverage, especially between 2019 and 2021, followed by a stabilization at a higher debt level.
- Stockholders’ Equity
- Stockholders’ equity showed a dramatic rise in 2021 after more moderate growth in the early years. Beginning at US$1,175 million in 2019, the equity more than doubled to US$2,561 million in 2020. It then surged to US$14,145 million in 2021 and continued to grow to US$19,123 million in 2022. However, in 2023, there was a significant decline to US$13,854 million. This peak followed by contraction indicates volatility in the company’s net assets, potentially reflecting market valuation changes or dividend payments.
- Invested Capital
- Invested capital experienced substantial volatility, showing an initial increase from US$481 million in 2019 to a peak of US$10,693 million in 2021. Following this peak, there was a sharp decline to US$7,126 million in 2022 and a further decrease to US$5,263 million in 2023. The sharp rise and subsequent decline suggest significant shifts in the company’s invested resources, which may be due to asset acquisitions or disposals, changes in working capital, or shifts in capital allocation strategies.
Overall, the data reveal a period of significant expansion in both debt and equity financing up to 2021 or 2022, followed by signs of retraction or adjustment in 2023. The increase in leverage alongside the rise in equity points to aggressive growth or investment phases, while the subsequent declines in equity and invested capital indicate possible strategic repositioning or market-related adjustments.
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Cost of Capital
Moderna Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 36,855) | 36,855) | ÷ | 38,098) | = | 0.97 | 0.97 | × | 25.95% | = | 25.11% | ||
| Financing lease liabilities3 | 575) | 575) | ÷ | 38,098) | = | 0.02 | 0.02 | × | 4.20% × (1 – 21.00%) | = | 0.05% | ||
| Operating lease liability4 | 668) | 668) | ÷ | 38,098) | = | 0.02 | 0.02 | × | 7.50% × (1 – 21.00%) | = | 0.10% | ||
| Total: | 38,098) | 1.00 | 25.26% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 53,802) | 53,802) | ÷ | 55,002) | = | 0.98 | 0.98 | × | 25.95% | = | 25.39% | ||
| Financing lease liabilities3 | 1,073) | 1,073) | ÷ | 55,002) | = | 0.02 | 0.02 | × | 3.60% × (1 – 21.00%) | = | 0.06% | ||
| Operating lease liability4 | 127) | 127) | ÷ | 55,002) | = | 0.00 | 0.00 | × | 7.50% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 55,002) | 1.00 | 25.46% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 60,967) | 60,967) | ÷ | 61,883) | = | 0.99 | 0.99 | × | 25.95% | = | 25.57% | ||
| Financing lease liabilities3 | 764) | 764) | ÷ | 61,883) | = | 0.01 | 0.01 | × | 3.10% × (1 – 21.00%) | = | 0.03% | ||
| Operating lease liability4 | 152) | 152) | ÷ | 61,883) | = | 0.00 | 0.00 | × | 6.80% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 61,883) | 1.00 | 25.61% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 61,888) | 61,888) | ÷ | 62,126) | = | 1.00 | 1.00 | × | 25.95% | = | 25.86% | ||
| Financing lease liabilities3 | 134) | 134) | ÷ | 62,126) | = | 0.00 | 0.00 | × | 13.10% × (1 – 21.00%) | = | 0.02% | ||
| Operating lease liability4 | 103) | 103) | ÷ | 62,126) | = | 0.00 | 0.00 | × | 10.30% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 62,126) | 1.00 | 25.89% | ||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 9,644) | 9,644) | ÷ | 9,780) | = | 0.99 | 0.99 | × | 25.95% | = | 25.59% | ||
| Financing lease liabilities3 | 39) | 39) | ÷ | 9,780) | = | 0.00 | 0.00 | × | 17.20% × (1 – 21.00%) | = | 0.05% | ||
| Operating lease liability4 | 97) | 97) | ÷ | 9,780) | = | 0.01 | 0.01 | × | 9.70% × (1 – 21.00%) | = | 0.08% | ||
| Total: | 9,780) | 1.00 | 25.72% | ||||||||||
Based on: 10-K (reporting date: 2019-12-31).
1 US$ in millions
2 Equity. See details »
3 Financing lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Moderna 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 | (6,744) | 1,706) | 11,998) | 2,008) | (729) | |
| Invested capital2 | 5,263) | 7,126) | 10,693) | 4,183) | 481) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -128.13% | 23.94% | 112.21% | 47.99% | -151.59% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| AbbVie Inc. | -3.72% | 5.70% | 5.06% | — | — | |
| Amgen Inc. | 2.44% | 6.98% | 6.97% | — | — | |
| Bristol-Myers Squibb Co. | 1.75% | -0.98% | 1.29% | — | — | |
| Danaher Corp. | -11.55% | -6.54% | -5.71% | — | — | |
| Eli Lilly & Co. | 1.66% | 8.76% | 10.42% | — | — | |
| Gilead Sciences Inc. | 3.06% | -0.06% | 6.94% | — | — | |
| Johnson & Johnson | 0.27% | 5.53% | 10.59% | — | — | |
| Merck & Co. Inc. | -8.69% | 11.50% | 11.65% | — | — | |
| Pfizer Inc. | -9.33% | 18.17% | 11.33% | — | — | |
| Regeneron Pharmaceuticals Inc. | 13.68% | 19.04% | 62.79% | — | — | |
| Thermo Fisher Scientific Inc. | -8.63% | -6.88% | -4.86% | — | — | |
| Vertex Pharmaceuticals Inc. | 11.36% | 14.11% | 15.32% | — | — | |
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 × -6,744 ÷ 5,263 = -128.13%
4 Click competitor name to see calculations.
The financial performance between 2019 and 2023 is characterized by extreme volatility in value creation, moving from an initial period of economic loss to a significant peak in profitability, followed by a sharp reversal into negative economic profit.
- Economic Profit Trends
- A dramatic shift occurred between 2019 and 2021, where economic profit transitioned from a loss of US$ 729 million to a peak of US$ 11,998 million. This upward trajectory reversed sharply in 2022, with profit falling to US$ 1,706 million, and culminated in a substantial economic loss of US$ 6,744 million by December 31, 2023.
- Invested Capital Dynamics
- Invested capital experienced rapid expansion during the early part of the period, growing from US$ 481 million in 2019 to a maximum of US$ 10,693 million in 2021. Following this peak, a consistent contraction is observed, with capital decreasing to US$ 7,126 million in 2022 and further declining to US$ 5,263 million by the end of 2023.
- Economic Spread Ratio Analysis
- The economic spread ratio reflects the volatility of the overall value creation process. A deeply negative starting point of -151.59% in 2019 shifted to a positive regime in 2020 (47.99%) and reached a zenith of 112.21% in 2021, indicating that the return on invested capital significantly exceeded the cost of capital during this window. However, the ratio collapsed to 23.94% in 2022 and plummeted to -128.13% in 2023, signaling a return to significant economic value destruction.
The correlation between the economic spread ratio and economic profit indicates that the period of maximum value creation in 2021 was driven by a simultaneous peak in both invested capital and operational returns. The subsequent decline in the spread ratio, despite a reduction in invested capital, highlights a substantial erosion in the ability to generate returns above the cost of capital by 2023.
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Economic Profit Margin
Moderna 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 | (6,744) | 1,706) | 11,998) | 2,008) | (729) | |
| Net product sales | 6,671) | 18,435) | 17,675) | 200) | —) | |
| Add: Increase (decrease) in deferred revenue | (2,060) | (4,157) | 2,824) | 3,842) | (72) | |
| Adjusted net product sales | 4,611) | 14,278) | 20,499) | 4,042) | (72) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -146.25% | 11.95% | 58.53% | 49.67% | — | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AbbVie Inc. | -4.67% | 8.06% | 8.64% | — | — | |
| Amgen Inc. | 6.35% | 11.18% | 11.55% | — | — | |
| Bristol-Myers Squibb Co. | 2.62% | -1.53% | 2.24% | — | — | |
| Danaher Corp. | -37.91% | -16.24% | -14.27% | — | — | |
| Eli Lilly & Co. | 1.43% | 7.46% | 9.61% | — | — | |
| Gilead Sciences Inc. | 5.20% | -0.10% | 12.28% | — | — | |
| Johnson & Johnson | 0.31% | 6.63% | 11.08% | — | — | |
| Merck & Co. Inc. | -10.11% | 14.34% | 16.91% | — | — | |
| Pfizer Inc. | -24.26% | 19.89% | 12.10% | — | — | |
| Regeneron Pharmaceuticals Inc. | 12.47% | 19.17% | 42.46% | — | — | |
| Thermo Fisher Scientific Inc. | -17.23% | -12.68% | -9.89% | — | — | |
| Vertex Pharmaceuticals Inc. | 15.25% | 20.82% | 18.98% | — | — | |
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 net product sales
= 100 × -6,744 ÷ 4,611 = -146.25%
3 Click competitor name to see calculations.
The financial performance over the five-year period is characterized by extreme volatility, moving from initial economic losses to a period of substantial value creation, followed by a sharp contraction into significant economic deficits.
- Economic Profit Trends
- Economic profit experienced a dramatic ascent, rising from a loss of 729 million USD in 2019 to a peak of 11,998 million USD in 2021. This trajectory reversed abruptly after 2021, with profit falling to 1,706 million USD in 2022 and collapsing to a deficit of 6,744 million USD by December 31, 2023.
- Adjusted Net Product Sales Performance
- Sales mirrored the movement of economic profit, showing an explosive increase from negative values in 2019 to a peak of 20,499 million USD in 2021. A consistent downward trend followed, with sales decreasing to 14,278 million USD in 2022 and further declining to 4,611 million USD in 2023.
- Economic Profit Margin Analysis
- The economic profit margin reflects a severe erosion of value efficiency. After achieving a peak margin of 58.53% in 2021, the margin contracted sharply to 11.95% in 2022. By 2023, the margin reached -146.25%, indicating that the costs of capital and operations significantly exceeded the generated revenue during that period.
The convergence of declining adjusted net product sales and plummeting economic profit suggests a period of rapid correction following a peak in demand. The transition from a high positive margin in 2021 to a deeply negative margin in 2023 underscores a significant shift in the company's ability to generate economic value above its cost of capital.
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