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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T-Mobile US Inc. pages available for free this week:
- Statement of Comprehensive Income
- Balance Sheet: Assets
- Cash Flow Statement
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Return on Assets (ROA) since 2013
- Total Asset Turnover since 2013
- Price to Earnings (P/E) since 2013
- Analysis of Revenues
- Analysis of Debt
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Economic Profit
T-Mobile US Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
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
= – × =
A significant transition in value creation is observed between 2021 and 2025, characterized by a shift from substantial economic losses to consistent economic profit. This trajectory is primarily driven by a rapid expansion in operational profitability, which eventually offset the charges associated with the cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- A strong upward trend in NOPAT is evident, with values increasing from 6,394 million US$ in 2021 to 18,761 million US$ by 2025. The most pronounced acceleration occurred between 2022 and 2023, where NOPAT approximately doubled from 7,149 million US$ to 14,313 million US$. This growth indicates a substantial improvement in operational efficiency and earnings power over the five-year period.
- Invested Capital and Cost of Capital
- Invested capital remained relatively stable from 2021 through 2024, fluctuating within a narrow range between 184,079 million US$ and 187,599 million US$, before increasing to 198,267 million US$ in 2025. Simultaneously, the cost of capital exhibited a gradual increase, peaking at 8.39% in 2024 before moderating to 8.07% in 2025. Because the capital base and the cost of capital remained relatively steady, the fluctuations in economic profit are directly attributable to the volatility and growth of NOPAT.
- Economic Profit Analysis
- The economic profit transitioned from a negative position of -7,155 million US$ in 2021 to a positive position of 2,771 million US$ by 2025. The company experienced value destruction through 2023, although the deficit narrowed sharply in that year to -325 million US$. The inflection point into value creation occurred in 2024, when economic profit reached 2,744 million US$. This reversal signifies that the return on invested capital has surpassed the weighted average cost of capital, marking a shift toward sustainable economic value added.
Net Operating Profit after Taxes (NOPAT)
T-Mobile US Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in restructuring initiatives.
5 Addition of increase (decrease) in equity equivalents to net income.
6 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2025 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income.
Net operating profit after taxes (NOPAT) demonstrated a consistent upward trajectory over the five-year period examined. Simultaneously, net income exhibited more volatility, with a decline in 2022 followed by substantial growth in subsequent years. The relationship between NOPAT and net income warrants further investigation, as the growth rates differ significantly.
- NOPAT Trend
- NOPAT increased from US$6,394 million in 2021 to US$7,149 million in 2022, representing a growth of approximately 11.8%. This upward trend continued with a significant increase to US$14,313 million in 2023, and further to US$18,486 million in 2024. The rate of increase slowed slightly in 2025, with NOPAT reaching US$18,761 million. Overall, NOPAT nearly tripled over the period.
- Net Income Trend
- Net income decreased from US$3,024 million in 2021 to US$2,590 million in 2022, a decline of approximately 14.4%. However, net income experienced substantial growth in 2023, reaching US$8,317 million, and continued to increase to US$11,339 million in 2024. In 2025, net income decreased slightly to US$10,992 million, though remaining significantly higher than the 2021 and 2022 levels.
- Relationship between NOPAT and Net Income
- While both metrics ultimately increased over the period, the divergence in their growth patterns is notable. The substantial increase in NOPAT relative to net income in 2023 and 2024 suggests potential changes in the company’s capital structure, tax rate, or non-operating items. Further analysis of these factors is recommended to understand the drivers behind this difference. The slight decrease in net income in 2025, despite continued NOPAT growth, reinforces the need for a deeper investigation into the components of net income.
The consistent growth in NOPAT indicates improving operational efficiency and profitability. However, the fluctuations in net income suggest that factors beyond core operations are influencing overall financial results. A comprehensive review of the company’s financial statements, including the income statement and balance sheet, is necessary to fully understand these trends.
Cash Operating Taxes
T-Mobile US Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The reported income tax expense and cash operating taxes demonstrate distinct trends over the five-year period. Income tax expense initially increased significantly, while cash operating taxes exhibited a more moderate and consistent upward trajectory.
- Income Tax Expense
- Income tax expense increased from US$327 million in 2021 to US$556 million in 2022, representing a substantial rise. This was followed by a dramatic increase to US$2,682 million in 2023. The expense continued to climb to US$3,373 million in 2024 before decreasing slightly to US$3,289 million in 2025. The volatility in income tax expense suggests potential impacts from changes in tax regulations, one-time adjustments, or significant shifts in pre-tax income.
- Cash Operating Taxes
- Cash operating taxes showed a consistent, albeit less dramatic, increase throughout the period. Starting at US$1,053 million in 2021, it rose to US$1,058 million in 2022 and US$1,069 million in 2023. The rate of increase accelerated in the later years, reaching US$1,244 million in 2024 and US$1,509 million in 2025. This steady growth indicates a consistent tax burden related to ongoing operations.
- Relationship between Income Tax Expense and Cash Operating Taxes
- A divergence is apparent between the two measures. While income tax expense experienced significant fluctuations, cash operating taxes demonstrated a more stable upward trend. In 2021 and 2022, cash operating taxes were considerably higher than the reported income tax expense. This difference narrowed in 2023 and 2024 as income tax expense increased, but remained substantial. The difference suggests potential timing differences between when income is recognized for accounting purposes and when taxes are actually paid, or the presence of deferred tax items.
The increasing trend in cash operating taxes warrants further investigation to assess its impact on future cash flows and overall financial performance. The volatility in income tax expense requires a detailed understanding of the underlying drivers to accurately forecast future tax liabilities.
Invested Capital
T-Mobile US Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
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 restructuring initiatives.
6 Addition of equity equivalents to stockholders’ equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of construction in progress.
The reported invested capital exhibited a generally increasing trend over the five-year period. While fluctuations occurred, the overall trajectory suggests a growing capital base. A closer examination of the components contributing to invested capital – total reported debt & leases and stockholders’ equity – reveals differing patterns.
- Total Reported Debt & Leases
- Total reported debt & leases consistently increased from 2021 to 2024, rising from US$106,011 million to US$110,280 million. A more substantial increase is observed in 2025, reaching US$118,737 million. This indicates a growing reliance on debt financing or potentially increased capital expenditure funded through debt.
- Stockholders’ Equity
- Stockholders’ equity demonstrated a decline throughout the period. Beginning at US$69,102 million in 2021, it decreased to US$59,203 million by 2025. This reduction could be attributed to factors such as share repurchases, dividend payments, or accumulated losses exceeding retained earnings.
- Invested Capital Composition
- Despite the decrease in stockholders’ equity, invested capital remained relatively stable between 2021 and 2024, fluctuating around US$186 million. The increase in debt partially offset the decline in equity, maintaining the overall invested capital level. However, the significant rise in debt in 2025, coupled with the continued decrease in equity, resulted in a noticeable increase in invested capital to US$198,267 million.
The observed trends suggest a shift in the company’s capital structure towards greater reliance on debt. The decreasing stockholders’ equity warrants further investigation to understand the underlying causes and potential implications for long-term financial health. The increase in invested capital in 2025, driven primarily by debt, should be analyzed in conjunction with the company’s operational performance and future investment plans.
Cost of Capital
T-Mobile US Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (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 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (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 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (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 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (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 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
T-Mobile US Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial trajectory indicates a significant turnaround in value creation, transitioning from a period of economic value destruction to a sustainable state of value addition over the analyzed five-year period.
- Economic Profit Trends
- A period of value destruction is evident between 2021 and 2023, with the most significant deficit occurring in 2022 at negative 7,346 million US dollars. A sharp recovery trend is observed starting in 2023, where the deficit was reduced to 325 million US dollars. This momentum led to a definitive shift into positive territory in 2024, with economic profit reaching 2,744 million US dollars and further increasing to 2,771 million US dollars by 2025.
- Invested Capital Analysis
- The capital base exhibited stability between 2021 and 2024, moving from 184,079 million US dollars to 187,599 million US dollars. A more pronounced increase in invested capital is observed in 2025, where the figure rose to 198,267 million US dollars, indicating a period of intensified capital deployment or asset expansion.
- Economic Spread Ratio Performance
- The economic spread ratio closely mirrors the trajectory of economic profit. The ratio began at -3.89% in 2021 and reached its lowest point of -3.94% in 2022. A critical inflection point is noted in 2023 as the ratio improved substantially to -0.17%, approaching a break-even state. The ratio transitioned to a positive value of 1.46% in 2024, before experiencing a marginal contraction to 1.40% in 2025, which correlates with the simultaneous increase in invested capital.
Economic Profit Margin
T-Mobile US Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial performance from 2021 through 2025 demonstrates a significant transition from economic value destruction to sustainable value creation. This shift is characterized by a move from substantial negative economic profits to positive margins, coinciding with a period of revenue stabilization followed by growth.
- Economic Profit Trends
- A period of significant economic loss was observed in 2021 and 2022, with the deficit widening to 7,346 million USD in 2022. A sharp recovery occurred in 2023, reducing the loss to 325 million USD, which paved the way for a transition into positive territory in 2024. By 2025, economic profit increased to 2,771 million USD, indicating that returns have begun to exceed the cost of capital.
- Adjusted Revenue Trajectory
- Adjusted revenues remained relatively stagnant between 2021 and 2023, with a slight decline from 79,944 million USD to 78,603 million USD. A growth phase emerged in 2024, with revenues rising to 81,797 million USD and further accelerating to 88,620 million USD by 2025, suggesting an expansion of the revenue base during the period of value creation.
- Economic Profit Margin Analysis
- The economic profit margin reflects a stark improvement in efficiency. A deep negative margin of 9.24% in 2022 improved drastically to -0.41% in 2023, nearly reaching the break-even point. The margin turned positive in 2024 at 3.35% and remained relatively stable at 3.13% in 2025, signaling a stabilized ability to generate economic value relative to total adjusted revenues.