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

Air Products & Chemicals Inc. (NYSE:APD)

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Economic Value Added (EVA)

Advanced level

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

Air Products & Chemicals Inc., economic profit calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24).

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. Air Products & Chemicals Inc.’s economic profit increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Net Operating Profit after Taxes (NOPAT)

Air Products & Chemicals Inc., NOPAT calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Net income attributable to Air Products
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for doubtful accounts2
Increase (decrease) in LIFO reserve3
Increase (decrease) in accrual for cost reduction actions4
Increase (decrease) in equity equivalents5
Interest expense
Interest expense, operating lease liability6
Adjusted interest expense
Tax benefit of interest expense7
Adjusted interest expense, after taxes8
(Income) loss from discontinued operations, net of tax9
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24).

1 Elimination of deferred tax expense. See details »

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

3 Addition of increase (decrease) in LIFO reserve. See details »

4 Addition of increase (decrease) in accrual for cost reduction actions.

5 Addition of increase (decrease) in equity equivalents to net income attributable to Air Products.

6 2020 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

7 2020 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

8 Addition of after taxes interest expense to net income attributable to Air Products.

9 Elimination of discontinued operations.

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. Air Products & Chemicals Inc.’s NOPAT increased from 2018 to 2019 and from 2019 to 2020.

Cash Operating Taxes

Air Products & Chemicals Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Income tax provision
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense
Cash operating taxes

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24).

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. Air Products & Chemicals Inc.’s cash operating taxes decreased from 2018 to 2019 and from 2019 to 2020.

Invested Capital

Air Products & Chemicals Inc., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel LibreOffice Calc
Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Short-term borrowings
Current portion of long-term debt
Long-term debt, excluding current portion
Long-term debt, related party
Operating lease liability1
Total reported debt & leases
Total Air Products shareholders’ equity
Net deferred tax (assets) liabilities2
Allowance for doubtful accounts3
LIFO reserve4
Accrual for cost reduction actions5
Equity equivalents6
Accumulated other comprehensive (income) loss, net of tax7
Noncontrolling interests
Adjusted total Air Products shareholders’ equity
Construction in progress8
Short-term investments9
Invested capital

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24).

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 LIFO reserve. See details »

5 Addition of accrual for cost reduction actions.

6 Addition of equity equivalents to total Air Products shareholders’ equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of construction in progress.

9 Subtraction of short-term investments.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Air Products & Chemicals Inc.’s invested capital increased from 2018 to 2019 and from 2019 to 2020.

Cost of Capital

Air Products & Chemicals Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2020-11-19).

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 ÷ = × =
Debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2019-11-26).

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 ÷ = × =
Debt3 ÷ = × × (1 – 24.50%) =
Operating lease liability4 ÷ = × × (1 – 24.50%) =
Total:

Based on: 10-K (filing date: 2018-11-20).

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 ÷ = × =
Debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2017-11-16).

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 ÷ = × =
Debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2016-11-21).

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 ÷ = × =
Debt3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2015-11-24).

1 US$ in thousands

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Air Products & Chemicals Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Selected Financial Data (US$ in thousands)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Ecolab Inc.
Linde plc

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24).

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. Air Products & Chemicals Inc.’s economic spread ratio improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.

Economic Profit Margin

Air Products & Chemicals Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Selected Financial Data (US$ in thousands)
Economic profit1
Sales
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Ecolab Inc.
Linde plc

Based on: 10-K (filing date: 2020-11-19), 10-K (filing date: 2019-11-26), 10-K (filing date: 2018-11-20), 10-K (filing date: 2017-11-16), 10-K (filing date: 2016-11-21), 10-K (filing date: 2015-11-24).

1 Economic profit. See details »

2 2020 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales
= 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. Air Products & Chemicals Inc.’s economic profit margin improved from 2018 to 2019 but then slightly deteriorated from 2019 to 2020.