Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

NVIDIA Corp. (NASDAQ:NVDA)

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Economic Value Added (EVA)

Advanced level


Economic Profit

NVIDIA Corp., economic profit calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2020 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= × =

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. NVIDIA Corp.’s economic profit increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.

Net Operating Profit after Taxes (NOPAT)

NVIDIA Corp., NOPAT calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Net income
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for doubtful accounts2
Increase (decrease) in deferred revenue3
Increase (decrease) in accrual for product warranty liabilities4
Increase (decrease) in accrued restructuring and other charges5
Increase (decrease) in equity equivalents6
Interest expense
Interest expense, operating lease liability7
Adjusted interest expense
Tax benefit of interest expense8
Adjusted interest expense, after taxes9
(Gain) loss on marketable securities
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income10
Investment income, after taxes11
Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for doubtful accounts.

3 Addition of increase (decrease) in deferred revenue.

4 Addition of increase (decrease) in accrual for product warranty liabilities.

5 Addition of increase (decrease) in accrued restructuring and other charges.

6 Addition of increase (decrease) in equity equivalents to net income.

7 2020 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

8 2020 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

9 Addition of after taxes interest expense to net income.

10 2020 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

11 Elimination of after taxes investment income.

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. NVIDIA Corp.’s NOPAT increased from 2018 to 2019 but then slightly decreased from 2019 to 2020 not reaching 2018 level.

Cash Operating Taxes

NVIDIA Corp., cash operating taxes calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Income tax expense (benefit)
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Less: Tax imposed on investment income
Cash operating taxes

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

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. NVIDIA Corp.’s cash operating taxes decreased from 2018 to 2019 but then slightly increased from 2019 to 2020.

Invested Capital

NVIDIA Corp., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel LibreOffice Calc
Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Convertible short-term debt
Long-term debt
Convertible long-term debt
Capital lease obligations, long-term
Operating lease liability1
Total reported debt & leases
Shareholders’ equity
Net deferred tax (assets) liabilities2
Allowance for doubtful accounts3
Deferred revenue4
Accrual for product warranty liabilities5
Accrued restructuring and other charges6
Equity equivalents7
Accumulated other comprehensive (income) loss, net of tax8
Adjusted shareholders’ equity
Construction in process9
Marketable securities (all classified as “available-for-sale” securities)10
Invested capital

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

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 accrual for product warranty liabilities.

6 Addition of accrued restructuring and other charges.

7 Addition of equity equivalents to shareholders’ equity.

8 Removal of accumulated other comprehensive income.

9 Subtraction of construction in process.

10 Subtraction of marketable securities (all classified as “available-for-sale” securities).

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. NVIDIA Corp.’s invested capital decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Cost of Capital

NVIDIA Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Total debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2020-02-20).

1 US$ in millions

2 Equity. See details »

3 Total debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Total debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2019-02-21).

1 US$ in millions

2 Equity. See details »

3 Total debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Total debt3 ÷ = × × (1 – 33.90%) =
Operating lease liability4 ÷ = × × (1 – 33.90%) =
Total:

Based on: 10-K (filing date: 2018-02-28).

1 US$ in millions

2 Equity. See details »

3 Total debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Total debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2017-03-01).

1 US$ in millions

2 Equity. See details »

3 Total debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Total debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2016-03-17).

1 US$ in millions

2 Equity. See details »

3 Total debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Total debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2015-03-12).

1 US$ in millions

2 Equity. See details »

3 Total debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

NVIDIA Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Advanced Micro Devices Inc.
Apple Inc.
Applied Materials Inc.
Broadcom Inc.
Cisco Systems Inc.
Intel Corp.
Lam Research Corp.
Micron Technology Inc.
Qualcomm Inc.
Texas Instruments Inc.

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

1 Economic profit. See details »

2 Invested capital. See details »

3 2020 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

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. NVIDIA Corp.’s economic spread ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Economic Profit Margin

NVIDIA Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Jan 26, 2020 Jan 27, 2019 Jan 28, 2018 Jan 29, 2017 Jan 31, 2016 Jan 25, 2015
Selected Financial Data (US$ in millions)
Economic profit1
 
Revenue
Add: Increase (decrease) in deferred revenue
Adjusted revenue
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Advanced Micro Devices Inc.
Apple Inc.
Applied Materials Inc.
Broadcom Inc.
Cisco Systems Inc.
Intel Corp.
Lam Research Corp.
Micron Technology Inc.
Qualcomm Inc.
Texas Instruments Inc.

Based on: 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-03-01), 10-K (filing date: 2016-03-17), 10-K (filing date: 2015-03-12).

1 Economic profit. See details »

2 2020 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company’s 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. NVIDIA Corp.’s economic profit margin improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.