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 – 25.25% × 5,263 = -6,743
The financial trajectory between 2019 and 2023 is characterized by a period of extraordinary growth and value creation followed by a sharp contraction and a return to value destruction. The volatility is most evident in the operating profits and the resulting economic profit, while the cost of capital remained remarkably stable throughout the period.
- Net Operating Profit After Taxes (NOPAT)
- A dramatic fluctuation in NOPAT is observed, starting from a loss of 605 million US$ in 2019 and surging to a peak of 14,737 million US$ in 2021. This peak was followed by a steep decline to 3,520 million US$ in 2022 and a further drop into negative territory, ending at -5,414 million US$ in 2023.
- Cost of Capital
- The cost of capital remained consistent across the five-year period, maintaining a narrow range between 25.25% and 25.88%. A slight downward trend is noted from 2020 onwards, though the rate remained high, indicating a significant hurdle rate that the company's investments needed to exceed to generate economic value.
- Invested Capital
- Invested capital saw a rapid expansion from 481 million US$ in 2019 to a maximum of 10,693 million US$ in 2021. Subsequent years show a steady reduction in the capital base, decreasing to 7,126 million US$ in 2022 and 5,263 million US$ in 2023, suggesting a contraction in the scale of invested resources.
- Economic Profit
- Economic profit closely mirrored the volatility of NOPAT. After an initial loss of 729 million US$ in 2019, the company achieved a substantial peak of 12,000 million US$ in 2021, representing a period of massive value creation. However, this trend reversed sharply, with economic profit falling to 1,707 million US$ in 2022 and collapsing to -6,743 million US$ in 2023, indicating that the operating returns were insufficient to cover the cost of the capital employed.
The overarching pattern indicates that the surge in economic value creation was temporary and tied to a period of rapid capital expansion and high operating profits. The transition to a significant negative economic profit in 2023 highlights a critical misalignment between the current operating returns and the high cost of capital.
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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$5,263 million in 2023. The sharp rise and subsequent decline suggest significant shifts in the company’s invested resources, which may be due to asset acquisitions or disposals, changes in working capital, or shifts in capital allocation strategies.
Overall, the data reveal a period of significant expansion in both debt and equity financing up to 2021 or 2022, followed by signs of retraction or adjustment in 2023. The increase in leverage alongside the rise in equity points to aggressive growth or investment phases, while the subsequent declines in equity and invested capital indicate possible strategic repositioning or market-related adjustments.
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Cost of Capital
Moderna Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 36,855) | 36,855) | ÷ | 38,098) | = | 0.97 | 0.97 | × | 25.94% | = | 25.09% | ||
| Financing lease liabilities3 | 575) | 575) | ÷ | 38,098) | = | 0.02 | 0.02 | × | 4.20% × (1 – 21.00%) | = | 0.05% | ||
| Operating lease liability4 | 668) | 668) | ÷ | 38,098) | = | 0.02 | 0.02 | × | 7.50% × (1 – 21.00%) | = | 0.10% | ||
| Total: | 38,098) | 1.00 | 25.25% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ 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 | × | 25.94% | = | 25.37% | ||
| 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 | 25.44% | ||||||||||
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 | × | 25.94% | = | 25.55% | ||
| 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 | 25.60% | ||||||||||
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 | × | 25.94% | = | 25.84% | ||
| 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 | 25.88% | ||||||||||
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 | × | 25.94% | = | 25.58% | ||
| 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 | 25.71% | ||||||||||
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 | (6,743) | 1,707) | 12,000) | 2,008) | (729) | |
| Invested capital2 | 5,263) | 7,126) | 10,693) | 4,183) | 481) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -128.11% | 23.95% | 112.22% | 48.01% | -151.58% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| AbbVie Inc. | -3.88% | 5.54% | 4.92% | — | — | |
| Amgen Inc. | 2.32% | 6.84% | 6.84% | — | — | |
| Bristol-Myers Squibb Co. | 1.60% | -1.15% | 1.14% | — | — | |
| Danaher Corp. | -11.64% | -6.63% | -5.80% | — | — | |
| Eli Lilly & Co. | 1.48% | 8.58% | 10.25% | — | — | |
| Gilead Sciences Inc. | 2.91% | -0.22% | 6.80% | — | — | |
| Johnson & Johnson | 0.09% | 5.35% | 10.41% | — | — | |
| Merck & Co. Inc. | -8.88% | 11.31% | 11.47% | — | — | |
| Pfizer Inc. | -9.45% | 18.02% | 11.19% | — | — | |
| Regeneron Pharmaceuticals Inc. | 13.49% | 18.86% | 62.61% | — | — | |
| Thermo Fisher Scientific Inc. | -8.72% | -6.97% | -4.95% | — | — | |
| Vertex Pharmaceuticals Inc. | 11.16% | 13.91% | 15.12% | — | — | |
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 × -6,743 ÷ 5,263 = -128.11%
4 Click competitor name to see calculations.
The financial trajectory from 2019 to 2023 exhibits a cycle of rapid capital expansion and value creation followed by a sharp contraction and value destruction. The volatility is most evident in the economic spread ratio, which shifted from significant negative values to high positive peaks before returning to a deep negative state by the end of the period.
- Economic Spread Ratio Trends
- The ratio experienced a dramatic reversal between 2019 and 2021, climbing from -151.58% to a peak of 112.22%. This indicates a period where the return on invested capital significantly exceeded the cost of capital. However, this trend reversed sharply after 2021, falling to 23.95% in 2022 and plummeting to -128.11% by December 31, 2023, signaling that the entity failed to generate returns above the cost of capital in the final fiscal year.
- Invested Capital Dynamics
- Invested capital saw an aggressive increase from US$ 481 million in 2019 to a peak of US$ 10,693 million in 2021. Following this peak, a consistent downward trend was observed, with capital reducing to US$ 7,126 million in 2022 and further to US$ 5,263 million in 2023, suggesting a contraction of the capital base.
- Economic Profit Fluctuations
- Economic profit mirrored the volatility of the spread ratio. After starting at -US$ 729 million in 2019, profit surged to a peak of US$ 12,000 million in 2021. This peak was followed by a precipitous decline to US$ 1,707 million in 2022 and a transition to a substantial loss of -US$ 6,743 million in 2023, indicating significant economic value destruction in the most recent reporting period.
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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 | (6,743) | 1,707) | 12,000) | 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 | -146.23% | 11.96% | 58.54% | 49.69% | — | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AbbVie Inc. | -4.87% | 7.84% | 8.39% | — | — | |
| Amgen Inc. | 6.03% | 10.96% | 11.33% | — | — | |
| Bristol-Myers Squibb Co. | 2.40% | -1.79% | 1.98% | — | — | |
| Danaher Corp. | -38.21% | -16.47% | -14.49% | — | — | |
| Eli Lilly & Co. | 1.27% | 7.30% | 9.45% | — | — | |
| Gilead Sciences Inc. | 4.94% | -0.37% | 12.03% | — | — | |
| Johnson & Johnson | 0.10% | 6.41% | 10.89% | — | — | |
| Merck & Co. Inc. | -10.33% | 14.10% | 16.66% | — | — | |
| Pfizer Inc. | -24.57% | 19.72% | 11.94% | — | — | |
| Regeneron Pharmaceuticals Inc. | 12.31% | 18.99% | 42.34% | — | — | |
| Thermo Fisher Scientific Inc. | -17.40% | -12.85% | -10.06% | — | — | |
| Vertex Pharmaceuticals Inc. | 14.97% | 20.52% | 18.74% | — | — | |
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 × -6,743 ÷ 4,611 = -146.23%
3 Click competitor name to see calculations.
The financial trajectory from 2019 to 2023 is characterized by an extreme cycle of rapid expansion followed by a significant contraction in economic value creation. After an initial period of economic loss, the organization experienced a sharp peak in both absolute economic profit and margin, which subsequently inverted into a substantial deficit by the end of the period.
- Economic Profit Trends
- Economic profit shifted from a deficit of 729 million USD in 2019 to a peak of 12,000 million USD in 2021. This growth was followed by a precipitous decline, falling to 1,707 million USD in 2022 and collapsing further to a deficit of 6,743 million USD in 2023. This volatility indicates a period of exceptional value creation that was not sustained.
- Adjusted Net Product Sales Performance
- Sales figures mirrored the economic profit trajectory, rising from negative 72 million USD in 2019 to a high of 20,499 million USD in 2021. A downward trend emerged thereafter, with sales decreasing to 14,278 million USD in 2022 and further contracting to 4,611 million USD in 2023, representing a significant reduction in the revenue base available to cover capital charges.
- Economic Profit Margin Analysis
- The economic profit margin exhibited severe fluctuation, reaching a maximum of 58.54% in 2021. A sharp contraction occurred in 2022, where the margin fell to 11.96%, before plunging to -146.23% in 2023. This transition suggests that the costs of capital and operating expenses have grown disproportionately relative to the shrinking adjusted net product sales, leading to significant economic value destruction in the final year of the analysis.
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