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:
- Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Return on Assets (ROA) since 2013
- Total Asset Turnover since 2013
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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 from value destruction to value creation is evident over the five-year period, characterized by a substantial increase in operating profitability that eventually outpaced the cost of capital.
- Net Operating Profit After Taxes (NOPAT) Trends
- A strong upward trajectory is observed in NOPAT, which grew from US$ 6,394 million in 2021 to US$ 18,761 million by 2025. A pivotal acceleration occurred between 2022 and 2023, where NOPAT more than doubled, signaling a marked improvement in operational performance and earnings power.
- Capital Investment and Cost of Capital
- Invested capital remained relatively stable from 2021 through 2024, ranging between US$ 184,079 million and US$ 187,599 million, before increasing to US$ 198,267 million in 2025. During this period, the cost of capital exhibited a general upward trend, rising from 7.34% in 2021 to a peak of 8.37% in 2024, before slightly moderating to 8.04% in 2025. This indicates an increasing cost of financing the capital base over the period.
- Economic Profit Evolution
- Economic profit shifted from significant negative values in 2021 (US$ -7,119 million) and 2022 (US$ -7,306 million) toward a near-break-even state in 2023 (US$ -284 million). A definitive turn toward value creation occurred in 2024, with economic profit reaching US$ 2,789 million, and further increasing to US$ 2,815 million in 2025. This reversal demonstrates that the growth in operational profits was sufficient to cover the rising capital charges, thereby generating a positive economic surplus.
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.
A significant transition in value creation is evident over the analyzed five-year period, shifting from substantial economic losses to consistent economic profit. This trajectory indicates a successful pivot toward generating returns that exceed the weighted average cost of capital, moving the organization from value destruction to value creation.
- Economic Profit Trends
- The period began with substantial negative economic profit, reaching a trough of negative 7,306 million USD in 2022. A rapid recovery is observed in 2023, as losses narrowed significantly to negative 284 million USD. By 2024, the metric shifted into positive territory at 2,789 million USD, with a slight increase to 2,815 million USD in 2025, signaling a stabilized state of positive economic value added.
- Invested Capital Dynamics
- Invested capital exhibited relative stability from 2021 through 2024, moving from 184,079 million USD to 187,599 million USD. However, a more pronounced increase occurred in 2025, where invested capital rose to 198,267 million USD. This growth in the capital base occurred concurrently with the maintenance of positive economic profit, suggesting efficient deployment of new capital.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrors the trend of economic profit, starting at -3.87% in 2021 and dipping slightly to -3.92% in 2022. A sharp correction occurred in 2023, bringing the ratio to -0.15%, effectively reaching a break-even point. The ratio turned positive in 2024 at 1.49% and remained largely consistent at 1.42% in 2025. This progression demonstrates an expanding margin between the return on invested capital and the cost of capital, confirming the improvement in overall financial efficiency.
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 to 2025 is characterized by a significant transition from economic value destruction to sustainable economic value creation. A critical inflection point occurred between 2022 and 2024, during which the organization pivoted from substantial economic losses to positive economic profit.
- Economic Profit Trends
- A period of significant economic loss is observed in 2021 and 2022, with deficits reaching -7,119 million USD and -7,306 million USD, respectively. A sharp recovery followed in 2023, as economic profit improved to -284 million USD, nearly reaching a break-even state. This upward trajectory culminated in a shift to positive territory in 2024 with 2,789 million USD, maintaining stability in 2025 at 2,815 million USD.
- Adjusted Revenue Dynamics
- Revenues remained relatively stagnant during the initial three years, experiencing a slight decline from 79,944 million USD in 2021 to 78,603 million USD in 2023. However, a growth phase emerged in the latter part of the period, with revenues increasing to 81,797 million USD in 2024 and further expanding to 88,620 million USD by 2025.
- Economic Profit Margin Analysis
- The economic profit margin mirrors the volatility and recovery of the absolute economic profit. The margin dipped to its lowest point of -9.19% in 2022 before experiencing a rapid ascent to -0.36% in 2023. The transition to a positive margin of 3.41% in 2024 represents a successful realignment of capital costs against operating returns. A slight compression to 3.18% is noted in 2025, occurring despite the increase in adjusted revenues, suggesting a slight increase in the cost of capital or a marginal decrease in the efficiency of value generation relative to the growth in scale.