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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Twenty-First Century Fox Inc., economic profit calculation

US$ in millions

12 months ended:	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
Net operating profit after taxes (NOPAT)¹	4,669)	4,273)	4,025)	9,417)	4,517)	7,896)
Cost of capital²	13.04%	11.73%	11.59%	12.35%	12.68%	12.90%
Invested capital³	47,272)	45,055)	42,462)	44,315)	48,265)	44,434)

Economic profit⁴	(1,498)	(1,011)	(895)	3,944)	(1,603)	2,164)

Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2018 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 4,669 – 13.04% × 47,272 = -1,498

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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.	Twenty-First Century Fox Inc. economic profit decreased from 2016 to 2017 and from 2017 to 2018.

Twenty-First Century Fox Inc., NOPAT calculation

US$ in millions

12 months ended:	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
Net income attributable to Twenty-First Century Fox, Inc. stockholders	4,464)	2,952)	2,755)	8,306)	4,514)	7,097)
Deferred income tax expense (benefit)¹	(903)	89)	466)	171)	(39)	480)
Increase (decrease) in allowances for returns and doubtful accounts²	(149)	(39)	70)	(309)	(84)	(87)
Increase (decrease) in deferred revenue³	98)	75)	57)	(242)	13)	(203)
Increase (decrease) in restructuring program liabilities⁴	(89)	41)	(393)	392)	(25)	(87)
Increase (decrease) in equity equivalents⁵	(1,043)	166)	200)	12)	(135)	103)
Interest expense, net	1,248)	1,219)	1,184)	1,198)	1,121)	1,063)
Interest expense, operating lease liability⁶	93)	104)	93)	99)	236)	225)
Adjusted interest expense, net	1,341)	1,323)	1,277)	1,297)	1,357)	1,288)
Tax benefit of interest expense, net⁷	(376)	(463)	(447)	(454)	(475)	(451)
Adjusted interest expense, net, after taxes⁸	966)	860)	830)	843)	882)	837)
(Gain) loss on marketable securities	—)	—)	(7)	(25)	(200)	(81)
Interest income	(39)	(36)	(38)	(39)	(26)	(57)
Investment income, before taxes	(39)	(36)	(45)	(64)	(226)	(138)
Tax expense (benefit) of investment income⁹	11)	13)	16)	22)	79)	48)
Investment income, after taxes¹⁰	(28)	(23)	(29)	(42)	(147)	(90)
(Income) loss from discontinued operations, net of tax¹¹	12)	44)	8)	67)	(729)	(277)
Net income (loss) attributable to noncontrolling interest	298)	274)	261)	231)	132)	226)
Net operating profit after taxes (NOPAT)	4,669)	4,273)	4,025)	9,417)	4,517)	7,896)

Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances for returns and doubtful accounts.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in restructuring program liabilities.

⁵ Addition of increase (decrease) in equity equivalents to net income attributable to Twenty-First Century Fox, Inc. stockholders.

⁶ 2018 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,553 × 6.01% = 93

⁷ 2018 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 1,341 × 28.00% = 376

⁸ Addition of after taxes interest expense to net income attributable to Twenty-First Century Fox, Inc. stockholders.

⁹ 2018 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 39 × 28.00% = 11

¹⁰ Elimination of after taxes investment income.

¹¹ Elimination of discontinued operations.

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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.	Twenty-First Century Fox Inc. NOPAT increased from 2016 to 2017 and from 2017 to 2018.

Twenty-First Century Fox Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
Provision for income taxes from continuing operations	(364)	1,419)	1,130)	1,243)	1,272)	1,690)
Less: Deferred income tax expense (benefit)	(903)	89)	466)	171)	(39)	480)
Add: Tax savings from interest expense, net	376)	463)	447)	454)	475)	451)
Less: Tax imposed on investment income	11)	13)	16)	22)	79)	48)
Cash operating taxes	904)	1,781)	1,095)	1,504)	1,707)	1,612)

Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).

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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.	Twenty-First Century Fox Inc. cash operating taxes increased from 2016 to 2017 but then decreased significantly from 2017 to 2018.

Twenty-First Century Fox Inc., invested capital calculation (financing approach)

US$ in millions

	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
Current borrowings	1,054)	457)	427)	244)	799)	137)
Non-current borrowings	18,469)	19,456)	19,298)	18,795)	18,259)	16,321)
Operating lease liability¹	1,553)	1,729)	1,506)	1,570)	3,690)	3,454)
Total reported debt & leases	21,076)	21,642)	21,231)	20,609)	22,748)	19,912)
Total Twenty-First Century Fox, Inc. stockholders’ equity	19,564)	15,722)	13,661)	17,220)	17,418)	16,998)
Net deferred tax (assets) liabilities²	1,816)	2,585)	2,610)	1,973)	2,668)	2,223)
Allowances for returns and doubtful accounts³	388)	537)	576)	506)	815)	899)
Deferred revenue⁴	826)	580)	505)	448)	690)	677)
Restructuring program liabilities⁵	88)	177)	136)	529)	137)	162)
Equity equivalents⁶	3,118)	3,879)	3,827)	3,456)	4,310)	3,961)
Accumulated other comprehensive (income) loss, net of tax⁷	2,001)	2,018)	2,144)	1,570)	34)	319)
Redeemable noncontrolling interests	764)	694)	552)	621)	541)	519)
Noncontrolling interests	1,234)	1,216)	1,220)	966)	3,483)	3,127)
Adjusted total Twenty-First Century Fox, Inc. stockholders’ equity	26,681)	23,529)	21,404)	23,833)	25,786)	24,924)
Construction in progress⁸	(228)	(116)	(173)	(109)	(145)	(134)
Available-for-sale securities⁹	(257)	—)	—)	(18)	(124)	(268)
Invested capital	47,272)	45,055)	42,462)	44,315)	48,265)	44,434)

Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).

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 program liabilities.

⁶ Addition of equity equivalents to total Twenty-First Century Fox, Inc. stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of construction in progress.

⁹ Subtraction of available-for-sale securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Twenty-First Century Fox Inc. invested capital increased from 2016 to 2017 and from 2017 to 2018.

Twenty-First Century Fox Inc., cost of capital calculations

Jun 30, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	83,959)	83,959)	÷	108,102)	=	0.78	0.78	×	15.55%	=	12.08%
Borrowings³	22,591)	22,591)	÷	108,102)	=	0.21	0.21	×	6.01% × (1 – 28.00%)	=	0.90%
Operating lease liability⁴	1,553)	1,553)	÷	108,102)	=	0.01	0.01	×	6.01% × (1 – 28.00%)	=	0.06%
Total:	108,102)					1.00					13.04%

Based on: 10-K (reporting date: 2018-06-30).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Jun 30, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	52,218)	52,218)	÷	77,801)	=	0.67	0.67	×	15.55%	=	10.44%
Borrowings³	23,853)	23,853)	÷	77,801)	=	0.31	0.31	×	6.03% × (1 – 35.00%)	=	1.20%
Operating lease liability⁴	1,729)	1,729)	÷	77,801)	=	0.02	0.02	×	6.03% × (1 – 35.00%)	=	0.09%
Total:	77,801)					1.00					11.73%

Based on: 10-K (reporting date: 2017-06-30).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Jun 30, 2016

	Capital (fair value)¹	Weights					Cost of capital
Equity²	48,724)	48,724)	÷	74,216)	=	0.66	0.66	×	15.55%	=	10.21%
Borrowings³	23,986)	23,986)	÷	74,216)	=	0.32	0.32	×	6.17% × (1 – 35.00%)	=	1.30%
Operating lease liability⁴	1,506)	1,506)	÷	74,216)	=	0.02	0.02	×	6.17% × (1 – 35.00%)	=	0.08%
Total:	74,216)					1.00					11.59%

Based on: 10-K (reporting date: 2016-06-30).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Jun 30, 2015

	Capital (fair value)¹	Weights					Cost of capital
Equity²	60,826)	60,826)	÷	84,394)	=	0.72	0.72	×	15.55%	=	11.21%
Borrowings³	21,998)	21,998)	÷	84,394)	=	0.26	0.26	×	6.30% × (1 – 35.00%)	=	1.07%
Operating lease liability⁴	1,570)	1,570)	÷	84,394)	=	0.02	0.02	×	6.30% × (1 – 35.00%)	=	0.08%
Total:	84,394)					1.00					12.35%

Based on: 10-K (reporting date: 2015-06-30).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Jun 30, 2014

	Capital (fair value)¹	Weights					Cost of capital
Equity²	78,316)	78,316)	÷	104,698)	=	0.75	0.75	×	15.55%	=	11.63%
Borrowings³	22,692)	22,692)	÷	104,698)	=	0.22	0.22	×	6.40% × (1 – 35.00%)	=	0.90%
Operating lease liability⁴	3,690)	3,690)	÷	104,698)	=	0.04	0.04	×	6.40% × (1 – 35.00%)	=	0.15%
Total:	104,698)					1.00					12.68%

Based on: 10-K (reporting date: 2014-06-30).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Jun 30, 2013

	Capital (fair value)¹	Weights					Cost of capital
Equity²	72,612)	72,612)	÷	94,822)	=	0.77	0.77	×	15.55%	=	11.91%
Borrowings³	18,756)	18,756)	÷	94,822)	=	0.20	0.20	×	6.51% × (1 – 35.00%)	=	0.84%
Operating lease liability⁴	3,454)	3,454)	÷	94,822)	=	0.04	0.04	×	6.51% × (1 – 35.00%)	=	0.15%
Total:	94,822)					1.00					12.90%

Based on: 10-K (reporting date: 2013-06-30).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Twenty-First Century Fox Inc., economic spread ratio calculation, comparison to benchmarks

	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
Selected Financial Data (US$ in millions)
Economic profit¹	(1,498)	(1,011)	(895)	3,944)	(1,603)	2,164)
Invested capital²	47,272)	45,055)	42,462)	44,315)	48,265)	44,434)
Performance Ratio
Economic spread ratio³	-3.17%	-2.24%	-2.11%	8.90%	-3.32%	4.87%
Benchmarks
Economic Spread Ratio, Competitors⁴
Alphabet Inc.	—	—	—	—	—	—
Comcast Corp.	—	—	—	—	—	—
Meta Platforms Inc.	—	—	—	—	—	—
Netflix Inc.	—	—	—	—	—	—
Walt Disney Co.	1.10%	—	—	—	—	—

Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2018 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,498 ÷ 47,272 = -3.17%

⁴ Click competitor name to see calculations.

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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.	Twenty-First Century Fox Inc. economic spread ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Twenty-First Century Fox Inc., economic profit margin calculation, comparison to benchmarks

	Jun 30, 2018	Jun 30, 2017	Jun 30, 2016	Jun 30, 2015	Jun 30, 2014	Jun 30, 2013
Selected Financial Data (US$ in millions)
Economic profit¹	(1,498)	(1,011)	(895)	3,944)	(1,603)	2,164)

Revenues	30,400)	28,500)	27,326)	28,987)	31,867)	27,675)
Add: Increase (decrease) in deferred revenue	98)	75)	57)	(242)	13)	(203)
Adjusted revenues	30,498)	28,575)	27,383)	28,745)	31,880)	27,472)
Performance Ratio
Economic profit margin²	-4.91%	-3.54%	-3.27%	13.72%	-5.03%	7.88%
Benchmarks
Economic Profit Margin, Competitors³
Alphabet Inc.	—	—	—	—	—	—
Comcast Corp.	—	—	—	—	—	—
Meta Platforms Inc.	—	—	—	—	—	—
Netflix Inc.	—	—	—	—	—	—
Walt Disney Co.	1.48%	—	—	—	—	—

Based on: 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30), 10-K (reporting date: 2016-06-30), 10-K (reporting date: 2015-06-30), 10-K (reporting date: 2014-06-30), 10-K (reporting date: 2013-06-30).

¹ Economic profit. See details »

² 2018 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -1,498 ÷ 30,498 = -4.91%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company 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.	Twenty-First Century Fox Inc. economic profit margin deteriorated from 2016 to 2017 and from 2017 to 2018.

Twenty-First Century Fox Inc. (NASDAQ:FOX)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin