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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Mondelēz International Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Dividend Discount Model (DDM)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
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Economic Profit
Mondelēz International 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 period under review demonstrates fluctuating financial performance as measured by economic profit. Net operating profit after taxes (NOPAT) exhibited volatility, increasing from US$3,858 million in 2020 to US$4,733 million in 2021, then decreasing significantly to US$3,016 million in 2022, before recovering to US$5,433 million in 2023 and slightly declining to US$5,271 million in 2024. The cost of capital generally increased from 9.49% in 2020 to 10.19% in 2023, before decreasing to 9.90% in 2024. Invested capital showed a moderate increase between 2020 and 2022, peaking at US$63,833 million, followed by a decrease in 2023 and 2024, reaching US$60,269 million.
- Economic Profit Trend
- Economic profit remained negative throughout the analyzed period, indicating that the company’s returns did not exceed its cost of capital. The magnitude of the economic loss decreased from US$-1,968 million in 2020 to US$-1,298 million in 2021. However, the economic loss widened considerably to US$-3,259 million in 2022, representing the largest deficit during the period. A substantial improvement was observed in 2023, with the economic loss reduced to US$-835 million, and this trend continued into 2024, with a further reduction to US$-693 million. This suggests a strengthening of profitability relative to the cost of capital in the latter years.
- Relationship between NOPAT and Economic Profit
- The fluctuations in NOPAT directly influenced economic profit. The increase in NOPAT from 2020 to 2021 contributed to a smaller economic loss. Conversely, the decline in NOPAT in 2022 resulted in a larger economic loss. The subsequent increases in NOPAT in 2023 and 2024 were key drivers in reducing the magnitude of the economic loss, despite a concurrent increase in the cost of capital during 2023.
- Impact of Cost of Capital
- The cost of capital remained relatively stable, with a slight upward trend until 2023. The increase in the cost of capital in 2023 partially offset the positive impact of the increased NOPAT, slowing the improvement in economic profit. The slight decrease in the cost of capital in 2024 likely contributed to the further reduction in the economic loss.
- Invested Capital and Economic Profit
- While invested capital increased initially, the subsequent decrease in 2023 and 2024 did not fully translate into improved economic profit. This suggests that the efficiency with which capital is utilized, as reflected in NOPAT, is a more significant driver of economic profit than the absolute level of invested capital during these years.
Net Operating Profit after Taxes (NOPAT)
Mondelēz International 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 allowances for credit losses.
3 Addition of increase (decrease) in restructuring Program liability.
4 Addition of increase (decrease) in equity equivalents to net earnings attributable to Mondelēz International.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest expense, debt = Adjusted interest expense, debt × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net earnings attributable to Mondelēz International.
- Net Earnings Attributable to Mondelēz International
- The net earnings demonstrated a fluctuating trend over the five-year period. Starting at 3,555 million US dollars in 2020, earnings increased notably to 4,300 million in 2021, showing significant growth. However, in 2022, there was a considerable decline to 2,717 million, representing a substantial decrease. The earnings then rose sharply in 2023 to reach 4,959 million, the highest point in the period under review, followed by a slight decline in 2024 to 4,611 million. Despite the fluctuations, the earnings in 2024 remained well above the 2020 level.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibited a similar pattern to net earnings, evidencing growth from 3,858 million US dollars in 2020 to 4,733 million in 2021. There was a decline in 2022 to 3,016 million, although this was less pronounced than the drop in net earnings. In 2023, NOPAT increased sharply, reaching 5,433 million, the peak during the period. A marginal decrease to 5,271 million occurred in 2024, yet the level remained significantly higher compared to the start of the period.
- General Observations
- Both net earnings and NOPAT show a cyclical pattern with peaks in 2021 and 2023, and troughs in 2022. The recovery after 2022 is strong, indicating resilience and effective operational performance. The overall upward trend from 2020 to 2024 reflects improvement in profitability and operational efficiency, despite the mid-period dip. The differences in magnitude of the declines and recoveries between net earnings and NOPAT may suggest varying impacts of operational and non-operational factors on profitability.
Cash Operating Taxes
Mondelēz International 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 fluctuated over the five-year period. It decreased from 1224 million USD in 2020 to 865 million USD in 2022, indicating a downward trend during these years. However, the figure rose sharply to 1537 million USD in 2023, the highest level in the series, before slightly declining to 1469 million USD in 2024. This pattern suggests variable tax charges, possibly influenced by changes in profitability, tax regulations, or accounting estimates.
- Cash Operating Taxes
- Cash operating taxes demonstrated a generally volatile trend as well. Starting at 1387 million USD in 2020, there was a decline to 1003 million USD by 2022. Subsequently, the amount increased substantially to 1697 million USD in 2023, marking the peak in this timeframe. The value then decreased to 1328 million USD in 2024. This fluctuation may reflect differences in actual cash paid versus tax provisions, timing of payments, or underlying operational profitability.
Invested Capital
Mondelēz International 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 allowance for doubtful accounts receivable.
4 Addition of restructuring Program liability.
5 Addition of equity equivalents to total Mondelēz International shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
- Total reported debt & leases
- The total reported debt and leases displayed a fluctuating trend over the given periods. It initially decreased from 20,706 million USD in 2020 to 20,145 million USD in 2021. However, it rose significantly to 23,613 million USD in 2022, indicating a marked increase in leverage or obligations during that year. Subsequently, the debt declined again to 20,110 million USD in 2023 and further decreased to 18,544 million USD in 2024, suggesting efforts to reduce debt levels after the peak in 2022.
- Total Mondelēz International shareholders’ equity
- Shareholders’ equity showed moderate variation but remained relatively stable throughout the years. An increase was observed from 27,578 million USD in 2020 to 28,269 million USD in 2021, followed by a decline to 26,883 million USD in 2022. Equity then recovered to 28,332 million USD in 2023 before a slight decrease to 26,932 million USD in 2024. These fluctuations may reflect changes in retained earnings, share repurchases, or other equity transactions.
- Invested capital
- Invested capital exhibited an overall stable pattern with some minor fluctuations. Starting at 61,366 million USD in 2020, it increased marginally to 61,560 million USD in 2021 and reached a peak of 63,833 million USD in 2022. However, it dropped to 61,495 million USD in 2023 and further declined to 60,269 million USD in 2024. This trend indicates that the company maintained a steady level of capital investment with slight adjustments possibly related to asset acquisitions or disposals and working capital changes.
Cost of Capital
Mondelēz International Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Mondelēz International 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 | ||||||
| Coca-Cola Co. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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.
The economic spread ratio exhibited fluctuations over the five-year period. Initially negative, the ratio demonstrated some improvement before declining again. Economic profit remained negative throughout the period, though with varying magnitudes. Invested capital showed a general increasing trend initially, followed by a decline in the most recent two years.
- Economic Spread Ratio
- The economic spread ratio began at -3.21% in 2020. It improved to -2.11% in 2021, indicating a reduced difference between the return on invested capital and the cost of capital. However, the ratio worsened considerably to -5.11% in 2022, representing the largest negative spread during the observed period. A subsequent improvement was noted in 2023 (-1.36%) and 2024 (-1.15%), suggesting a narrowing of the gap between returns and costs, but the ratio remained negative.
- Economic Profit
- Economic profit was negative across all five years. The largest negative economic profit occurred in 2022, at -3,259 US$ millions. The figure for 2020 was -1,968 US$ millions, decreasing to -1,298 US$ millions in 2021. A substantial increase in the negative economic profit was observed in 2022, followed by reductions in the negative amount in both 2023 (-835 US$ millions) and 2024 (-693 US$ millions). This indicates a lessening of the shortfall between economic profit and zero, though profitability from an economic value perspective remains elusive.
- Invested Capital
- Invested capital generally increased from 2020 to 2022, moving from 61,366 US$ millions to 63,833 US$ millions. A decrease was then observed in 2023 (61,495 US$ millions) and continued into 2024, with invested capital reaching 60,269 US$ millions. This suggests a potential shift in capital allocation strategy or a reduction in capital-intensive projects in the latter part of the period.
The combined trends suggest that while the company has been attempting to improve its economic spread, it continues to destroy economic value as evidenced by the consistently negative economic profit. The recent decline in invested capital may be a response to the persistent negative economic profit, or driven by other strategic considerations.
Economic Profit Margin
Mondelēz International 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 | ||||||
| Net revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Coca-Cola Co. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 ÷ Net revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The economic profit margin exhibited considerable fluctuation between 2020 and 2024. Initially negative, the margin demonstrated improvement before declining again, ultimately stabilizing in the most recent period. A review of the underlying figures reveals a complex relationship between net revenues and economic profit.
- Economic Profit Margin
- The economic profit margin began at -7.40% in 2020. An improvement was noted in 2021, with the margin increasing to -4.52%. However, this positive trend reversed in 2022, as the margin deteriorated significantly to -10.35%, representing the lowest value within the observed timeframe. A substantial recovery occurred in 2023, with the margin rising to -2.32%. This improvement continued into 2024, albeit at a slower pace, reaching -1.90%.
- Economic Profit
- Economic profit itself was consistently negative throughout the period. The initial value of -1,968 million in 2020 improved to -1,298 million in 2021, mirroring the improvement in the economic profit margin. A substantial decrease in economic profit was observed in 2022, falling to -3,259 million, which corresponded with the lowest economic profit margin. Subsequent years saw improvements, with economic profit reaching -835 million in 2023 and -693 million in 2024.
- Net Revenues
- Net revenues demonstrated a consistent upward trend throughout the period. From 26,581 million in 2020, revenues increased to 28,720 million in 2021, 31,496 million in 2022, and 36,016 million in 2023. The rate of growth slowed slightly in 2024, with revenues reaching 36,441 million. The consistent growth in net revenues did not translate directly into positive economic profit, suggesting that the cost of capital or other factors impacting economic profit are significant.
The divergence between the increasing net revenues and the consistently negative economic profit suggests that while the company is generating more sales, it is not generating sufficient returns above its cost of capital. The stabilization of the economic profit margin in 2024, despite continued revenue growth, indicates a potential leveling off of the factors negatively impacting economic profit.