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
Starbucks Corp., economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27).
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
= 2,453,553 – 14.86% × 24,013,900 = -1,115,913
The analysis of economic value added reveals a period of volatility in value creation, characterized by a recovery phase followed by a significant downturn. After an initial period of value destruction in 2020, the organization maintained positive economic profit for four consecutive years before returning to a deficit in 2025.
- Net Operating Profit After Taxes (NOPAT)
- A sharp increase in NOPAT is observed between 2020 and 2021, rising from 1,475,541 thousand USD to 4,625,159 thousand USD. While profitability remained relatively high through 2024, a substantial contraction occurred in 2025, with NOPAT falling to 2,453,553 thousand USD, indicating a significant decline in operational efficiency or market demand.
- Invested Capital and Cost of Capital
- The cost of capital exhibited minimal variance, remaining stable between 14.86% and 15.56% throughout the analyzed period. Invested capital, after a decline in 2022 to 20,459,700 thousand USD, entered a period of consistent growth, reaching a peak of 24,013,900 thousand USD by September 2025.
- Economic Profit Trends
- Economic profit transitioned from a loss of 1,950,492 thousand USD in 2020 to positive territory, peaking at 1,154,081 thousand USD in 2023. This period of value creation was eroded by 2025, when the convergence of decreasing NOPAT and increasing invested capital resulted in an economic profit of -1,115,913 thousand USD, signaling that the returns on invested capital fell below the cost of capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Net Operating Profit after Taxes (NOPAT)
Starbucks Corp., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in stored value card liability and deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net earnings attributable to Starbucks.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 10,536,700 × 3.70% = 389,858
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 932,458 × 21.00% = 195,816
7 Addition of after taxes interest expense to net earnings attributable to Starbucks.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -900 × 21.00% = -189
9 Elimination of after taxes investment income.
The financial data reveals notable fluctuations in Starbucks Corp.'s profitability over the examined periods. Both net earnings attributable to the company and net operating profit after taxes (NOPAT) demonstrate cyclical trends with periods of significant increases followed by declines.
- Net Earnings Attributable to Starbucks
- The net earnings show a strong increase from approximately 928 million US dollars in late 2020 to over 4.1 billion in early 2021. Following this peak, there is a decline to around 3.28 billion in late 2022, then a rebound to about 4.12 billion in early 2023. Subsequently, net earnings decrease again to approximately 3.76 billion and further decline to 1.86 billion by late 2025. This pattern suggests volatility in profitability with significant year-to-year variation.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT trends closely parallel net earnings, starting at about 1.48 billion in 2020 and increasing sharply to over 4.62 billion in 2021. It then decreases to roughly 3.73 billion in 2022 before rising to nearly 4.60 billion in 2023. After this, NOPAT slightly declines to about 4.41 billion in 2024 and experiences a substantial drop to 2.45 billion by 2025. This indicates that operating efficiency and tax-related impacts also varied significantly over the time horizon, affecting profitability.
Overall, the data suggests that the company experienced pronounced growth in profitability around 2021 and 2023, but these gains were not consistently sustained into later periods. The declines toward 2025 could indicate emerging operational or market challenges impacting earnings and operating profit. This volatility warrants closer examination of underlying drivers such as cost management, revenue fluctuations, and external economic conditions influencing performance.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Cash Operating Taxes
Starbucks Corp., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27).
The analysis of the tax-related financial data displays variable trends in both income tax expense and cash operating taxes over the observed periods.
- Income Tax Expense
- The income tax expense demonstrates a fluctuating pattern with an initial value of 239,700 thousand US dollars, substantially rising to a peak of 1,157,600 thousand US dollars by the second period. This peak is followed by a decrease to 948,500 thousand US dollars, then an increase again to 1,277,200 thousand US dollars, maintaining a relatively high level in the next period at 1,207,300 thousand US dollars before declining sharply to 650,600 thousand US dollars in the latest period. Overall, the trend suggests volatility with a recent downward correction.
- Cash Operating Taxes
- Cash operating taxes show a broadly similar trend marked by significant increases and decreases. Starting at 405,721 thousand US dollars, this figure rises steeply to 1,427,074 thousand US dollars in the subsequent year, then declines to 1,074,728 thousand US dollars. Subsequently, there is a rise to a peak of 1,512,061 thousand US dollars, followed by a slight decrease to 1,412,248 thousand US dollars before dropping significantly to 858,305 thousand US dollars in the last recorded period. This pattern suggests notable fluctuations with peaks that generally coincide with the trends observed in income tax expenses.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Invested Capital
Starbucks Corp., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27).
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 stored value card liability and deferred revenue.
5 Addition of equity equivalents to shareholders’ deficit.
6 Removal of accumulated other comprehensive income.
7 Subtraction of work in progress.
8 Subtraction of marketable securities.
The financial data over the span of six years reveals several key trends concerning debt, shareholders' equity, and invested capital.
- Total Reported Debt & Leases
- The total reported debt and leases initially decreased from approximately 24.82 billion USD in 2020 to around 23.61 billion USD in 2021, indicating a reduction in debt levels. However, from 2021 onward, there was a consistent upward trend, reaching approximately 26.61 billion USD by 2025. This suggests a gradual increase in borrowing or lease obligations over this period, possibly reflecting increased leverage or financing activities.
- Shareholders’ Deficit
- The shareholders’ deficit showed considerable fluctuation across the years. Starting with a deficit of about -7.81 billion USD in 2020, it improved significantly to approximately -5.32 billion USD in 2021. This improvement could indicate a reduction in accumulated losses or liabilities exceeding equity. However, the deficit then worsened to about -8.71 billion USD in 2022, before improving slightly in the subsequent years but remaining negative through 2025. The persistent negative shareholders’ equity highlights ongoing challenges in equity capitalization or retained earnings, signaling potential financial stress or large accumulations of losses.
- Invested Capital
- Invested capital showed an initial increase from 22.97 billion USD in 2020 to 23.68 billion USD in 2021, followed by a notable decline to approximately 20.46 billion USD in 2022. After 2022, invested capital steadily increased year over year, reaching around 24.01 billion USD in 2025. This pattern may reflect variations in total capital deployed in the business, possibly influenced by asset acquisitions, disposals, or changes in working capital management. The recovery and growth in invested capital post-2022 suggest renewed investment or improved operational capacity.
Overall, the company displayed a fluctuating financial structure with increasing debt levels in recent years alongside a persistent negative shareholders’ deficit, which raises concerns regarding financial stability. The invested capital trend indicates some volatility but a general recovery trend after 2022, potentially aligned with strategic investments or operational enhancements.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Cost of Capital
Starbucks Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 96,403,338) | 96,403,338) | ÷ | 121,908,238) | = | 0.79 | 0.79 | × | 17.99% | = | 14.23% | ||
| Debt3 | 14,968,200) | 14,968,200) | ÷ | 121,908,238) | = | 0.12 | 0.12 | × | 3.97% × (1 – 21.00%) | = | 0.39% | ||
| Operating lease liability4 | 10,536,700) | 10,536,700) | ÷ | 121,908,238) | = | 0.09 | 0.09 | × | 3.70% × (1 – 21.00%) | = | 0.25% | ||
| Total: | 121,908,238) | 1.00 | 14.86% | ||||||||||
Based on: 10-K (reporting date: 2025-09-28).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 111,407,188) | 111,407,188) | ÷ | 136,288,588) | = | 0.82 | 0.82 | × | 17.99% | = | 14.71% | ||
| Debt3 | 14,646,700) | 14,646,700) | ÷ | 136,288,588) | = | 0.11 | 0.11 | × | 3.83% × (1 – 21.00%) | = | 0.33% | ||
| Operating lease liability4 | 10,234,700) | 10,234,700) | ÷ | 136,288,588) | = | 0.08 | 0.08 | × | 3.40% × (1 – 21.00%) | = | 0.20% | ||
| Total: | 136,288,588) | 1.00 | 15.23% | ||||||||||
Based on: 10-K (reporting date: 2024-09-29).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 120,001,419) | 120,001,419) | ÷ | 142,661,219) | = | 0.84 | 0.84 | × | 17.99% | = | 15.13% | ||
| Debt3 | 13,459,700) | 13,459,700) | ÷ | 142,661,219) | = | 0.09 | 0.09 | × | 3.55% × (1 – 21.00%) | = | 0.26% | ||
| Operating lease liability4 | 9,200,100) | 9,200,100) | ÷ | 142,661,219) | = | 0.06 | 0.06 | × | 3.10% × (1 – 21.00%) | = | 0.16% | ||
| Total: | 142,661,219) | 1.00 | 15.56% | ||||||||||
Based on: 10-K (reporting date: 2023-10-01).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 112,427,010) | 112,427,010) | ÷ | 134,414,910) | = | 0.84 | 0.84 | × | 17.99% | = | 15.05% | ||
| Debt3 | 13,227,000) | 13,227,000) | ÷ | 134,414,910) | = | 0.10 | 0.10 | × | 3.30% × (1 – 21.00%) | = | 0.26% | ||
| Operating lease liability4 | 8,760,900) | 8,760,900) | ÷ | 134,414,910) | = | 0.07 | 0.07 | × | 2.60% × (1 – 21.00%) | = | 0.13% | ||
| Total: | 134,414,910) | 1.00 | 15.44% | ||||||||||
Based on: 10-K (reporting date: 2022-10-02).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 129,967,096) | 129,967,096) | ÷ | 154,970,496) | = | 0.84 | 0.84 | × | 17.99% | = | 15.09% | ||
| Debt3 | 16,014,100) | 16,014,100) | ÷ | 154,970,496) | = | 0.10 | 0.10 | × | 3.29% × (1 – 21.00%) | = | 0.27% | ||
| Operating lease liability4 | 8,989,300) | 8,989,300) | ÷ | 154,970,496) | = | 0.06 | 0.06 | × | 2.50% × (1 – 21.00%) | = | 0.11% | ||
| Total: | 154,970,496) | 1.00 | 15.47% | ||||||||||
Based on: 10-K (reporting date: 2021-10-03).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 109,776,161) | 109,776,161) | ÷ | 136,624,161) | = | 0.80 | 0.80 | × | 17.99% | = | 14.45% | ||
| Debt3 | 17,937,500) | 17,937,500) | ÷ | 136,624,161) | = | 0.13 | 0.13 | × | 3.19% × (1 – 21.00%) | = | 0.33% | ||
| Operating lease liability4 | 8,910,500) | 8,910,500) | ÷ | 136,624,161) | = | 0.07 | 0.07 | × | 2.50% × (1 – 21.00%) | = | 0.13% | ||
| Total: | 136,624,161) | 1.00 | 14.91% | ||||||||||
Based on: 10-K (reporting date: 2020-09-27).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Starbucks Corp., economic spread ratio calculation, comparison to benchmarks
| Sep 28, 2025 | Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | Sep 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (1,115,913) | 824,952) | 1,154,081) | 573,831) | 961,085) | (1,950,492) | |
| Invested capital2 | 24,013,900) | 23,526,800) | 22,171,000) | 20,459,700) | 23,683,800) | 22,970,900) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -4.65% | 3.51% | 5.21% | 2.80% | 4.06% | -8.49% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Airbnb Inc. | 24.28% | 24.10% | 9.37% | 11.00% | -11.10% | — | |
| Booking Holdings Inc. | 24.23% | 29.09% | 14.64% | 3.79% | -13.66% | — | |
| Chipotle Mexican Grill Inc. | 9.14% | 8.60% | 7.02% | 2.82% | -1.67% | — | |
| DoorDash, Inc. | -19.02% | -27.06% | -39.50% | -53.28% | -39.79% | — | |
| McDonald’s Corp. | 9.08% | 8.60% | 8.67% | 5.87% | 8.30% | — | |
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,115,913 ÷ 24,013,900 = -4.65%
4 Click competitor name to see calculations.
The analysis of the economic spread ratio reveals a period of significant volatility, characterized by an initial recovery phase followed by a sharp decline in value creation.
- Economic Spread Ratio Trends
- The ratio began at -8.49% in 2020, indicating that the return on invested capital was substantially below the cost of capital. A recovery period occurred between 2021 and 2024, with the ratio peaking at 5.21% in 2023. However, this positive trend reversed sharply in 2025, with the ratio falling to -4.65%, signifying a renewed inability to generate returns exceeding the cost of capital.
- Economic Profit Performance
- Economic profit mirrored the movements of the spread ratio, starting with a deficit of US$ 1,950,492 thousand in 2020. Positive economic profits were sustained from 2021 through 2024, reaching a maximum of US$ 1,154,081 thousand in 2023. By 2025, economic profit returned to negative territory, amounting to a loss of US$ 1,115,913 thousand.
- Invested Capital Dynamics
- Invested capital remained relatively stable throughout the analyzed period, fluctuating within a range of US$ 20,459,700 thousand to US$ 24,013,900 thousand. Because the capital base remained consistent, the volatility observed in the economic spread and economic profit is attributable to fluctuations in operational performance and the cost of capital rather than significant changes in the scale of investment.
The cyclical nature of the economic spread indicates an inconsistent ability to maintain a premium over the cost of capital. The shift from a peak spread in 2023 to a negative spread in 2025 suggests a significant erosion of economic value added over the final two years of the period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Economic Profit Margin
Starbucks Corp., economic profit margin calculation, comparison to benchmarks
| Sep 28, 2025 | Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | Sep 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | (1,115,913) | 824,952) | 1,154,081) | 573,831) | 961,085) | (1,950,492) | |
| Net revenues | 37,184,400) | 36,176,200) | 35,975,600) | 32,250,300) | 29,060,600) | 23,518,000) | |
| Add: Increase (decrease) in stored value card liability and deferred revenue | (131,600) | (57,200) | (119,600) | (137,500) | 4,100) | 41,600) | |
| Adjusted net revenues | 37,052,800) | 36,119,000) | 35,856,000) | 32,112,800) | 29,064,700) | 23,559,600) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -3.01% | 2.28% | 3.22% | 1.79% | 3.31% | -8.28% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Airbnb Inc. | 11.31% | 13.09% | 5.45% | 8.74% | -10.04% | — | |
| Booking Holdings Inc. | 11.62% | 15.90% | 7.82% | 3.02% | -18.71% | — | |
| Chipotle Mexican Grill Inc. | 5.59% | 5.18% | 4.26% | 1.76% | -1.21% | — | |
| DoorDash, Inc. | -15.59% | -15.80% | -23.96% | -43.06% | -25.88% | — | |
| McDonald’s Corp. | 18.11% | 16.47% | 17.02% | 11.51% | 17.04% | — | |
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × -1,115,913 ÷ 37,052,800 = -3.01%
3 Click competitor name to see calculations.
The analysis of economic value creation over the six-year period reveals a significant divergence between revenue growth and economic profitability. While adjusted net revenues demonstrated consistent year-over-year growth, economic profit and the corresponding margin exhibited high volatility, ending the period in a negative position.
- Revenue Growth Trajectory
- Adjusted net revenues showed a steady upward trend, increasing from US$ 23.56 billion in 2020 to US$ 37.05 billion in 2025. This represents a consistent expansion of the top line throughout the entire analyzed timeframe.
- Economic Profit Volatility
- Economic profit fluctuated significantly, starting with a substantial deficit of US$ 1.95 billion in 2020. The metric recovered to positive territory between 2021 and 2024, peaking at US$ 1.15 billion in 2023. However, a sharp reversal occurred in 2025, with economic profit falling to negative US$ 1.12 billion, indicating that the returns generated were insufficient to cover the cost of capital employed.
- Economic Profit Margin Dynamics
- The economic profit margin mirrored the volatility of absolute economic profit. Following a low of -8.28% in 2020, the margin stabilized between 1.79% and 3.31% from 2021 through 2024. The period concluded with a decline to -3.01% in 2025. This contraction in margin, despite rising revenues, suggests a degradation in capital efficiency or an increase in the weighted average cost of capital during the final year.
Overall, the data indicates that revenue expansion did not translate into sustained economic value addition. The transition from a positive economic profit margin in 2024 to a negative margin in 2025 highlights a critical shift in the company's ability to generate returns above its cost of capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?