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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

AmerisourceBergen Corp., economic profit calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Net operating profit after taxes (NOPAT)¹	2,392,410)	1,778,708)	(4,619,749)	1,185,025)	1,018,004)	771,526)
Cost of capital²	10.23%	9.37%	9.95%	9.84%	9.92%	10.02%
Invested capital³	13,020,519)	12,902,673)	7,128,161)	12,346,959)	12,285,847)	10,870,238)

Economic profit⁴	1,060,686)	570,295)	(5,329,141)	(29,400)	(200,839)	(317,249)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,392,410 – 10.23% × 13,020,519 = 1,060,686

The financial trajectory from 2017 to 2022 reflects a significant transition from economic value destruction to value creation. This period is marked by a severe operational contraction in 2020, followed by a robust recovery and an expansion of profitability in the final two years.

Net Operating Profit After Taxes (NOPAT): A steady upward trend was observed between 2017 and 2019, with NOPAT rising from 771.5 million to 1.18 billion. This growth was abruptly interrupted in 2020 by a substantial loss of 4.62 billion. However, a strong recovery followed, with profits rebounding to 1.78 billion in 2021 and reaching a peak of 2.39 billion by September 30, 2022.
Invested Capital: Invested capital increased gradually from 10.87 billion in 2017 to 12.35 billion in 2019. A sharp decline to 7.13 billion occurred in 2020, representing a significant reduction in the capital base. This contraction was temporary, as invested capital returned to 12.90 billion in 2021 and further increased to 13.02 billion in 2022.
Cost of Capital: The cost of capital remained relatively stable throughout the analyzed period, fluctuating within a narrow range. It reached a low of 9.37% in 2021 before rising to its highest point of 10.23% in 2022.
Economic Profit: Economic profit was negative from 2017 to 2020, indicating that the company was unable to generate returns exceeding its cost of capital. The deficit reached its maximum in 2020 at 5.33 billion. A critical inflection point occurred in 2021, when economic profit shifted to a positive 570.3 million. This positive momentum continued into 2022, with economic profit increasing to 1.06 billion, confirming the shift toward sustainable value creation.

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AmerisourceBergen Corp., NOPAT calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Net income (loss) attributable to AmerisourceBergen Corporation	1,698,820)	1,539,932)	(3,408,716)	855,365)	1,658,405)	364,484)
Deferred income tax expense (benefit)¹	196,184)	334,866)	(1,544,971)	28,537)	(795,524)	319,069)
Increase (decrease) in allowances for returns and credit losses²	270,045)	(60,624)	194,402)	186,573)	(14,028)	145,016)
Increase (decrease) in LIFO reserve³	67,200)	(203,000)	7,400)	(22,600)	67,400)	(157,800)
Increase (decrease) in equity equivalents⁴	533,429)	71,242)	(1,343,169)	192,510)	(742,152)	306,285)
Interest expense	231,982)	182,544)	158,522)	195,474)	189,640)	149,042)
Interest expense, operating lease liability⁵	32,924)	32,075)	17,785)	17,396)	16,379)	9,826)
Adjusted interest expense	264,906)	214,619)	176,307)	212,870)	206,019)	158,868)
Tax benefit of interest expense⁶	(55,630)	(45,070)	(37,024)	(44,703)	(50,475)	(55,604)
Adjusted interest expense, after taxes⁷	209,275)	169,549)	139,283)	168,167)	155,545)	103,264)
Interest income	(21,309)	(8,470)	(20,639)	(37,705)	(14,941)	(3,857)
Investment income, before taxes	(21,309)	(8,470)	(20,639)	(37,705)	(14,941)	(3,857)
Tax expense (benefit) of investment income⁸	4,475)	1,779)	4,334)	7,918)	3,661)	1,350)
Investment income, after taxes⁹	(16,834)	(6,691)	(16,305)	(29,787)	(11,280)	(2,507)
Net income (loss) attributable to noncontrolling interest	(32,280)	4,676)	9,158)	(1,230)	(42,513)	—)
Net operating profit after taxes (NOPAT)	2,392,410)	1,778,708)	(4,619,749)	1,185,025)	1,018,004)	771,526)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances for returns and credit losses.

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

⁴ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to AmerisourceBergen Corporation.

⁵ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,022,472 × 3.22% = 32,924

⁶ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 264,906 × 21.00% = 55,630

⁷ Addition of after taxes interest expense to net income (loss) attributable to AmerisourceBergen Corporation.

⁸ 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 21,309 × 21.00% = 4,475

⁹ Elimination of after taxes investment income.

Net income (loss) attributable to AmerisourceBergen Corporation: The net income figures exhibit significant volatility over the analyzed periods. Initially, there is a substantial increase from approximately 364 million USD in 2017 to around 1.66 billion USD in 2018, followed by a notable decline to about 855 million USD in 2019. The year 2020 stands out with a dramatic shift into a net loss of approximately 3.41 billion USD, indicating a severe financial setback. However, recovery occurs in subsequent years, with net income rebounding to nearly 1.54 billion USD in 2021 and increasing slightly to approximately 1.70 billion USD in 2022. This trend suggests a sharp but temporary disruption in profitability, with the company managing to restore positive earnings thereafter.
Net operating profit after taxes (NOPAT): The NOPAT figures mirror the overall pattern observed in net income but show even greater variability. From 2017 to 2019, NOPAT demonstrates consistent growth, increasing from approximately 772 million USD to nearly 1.19 billion USD. In 2020, a significant downturn occurs, with NOPAT plunging into a substantial negative figure of roughly 4.62 billion USD, signaling operational challenges or extraordinary expenses. The company recovers in 2021 and 2022, with NOPAT rising to approximately 1.78 billion USD and further to about 2.39 billion USD, exceeding previous peak levels. This rebound reflects improved operational efficiency or favorable conditions post-2020.

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AmerisourceBergen Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Provision (benefit) for income taxes	516,517)	677,251)	(1,894,273)	112,971)	(438,469)	553,403)
Less: Deferred income tax expense (benefit)	196,184)	334,866)	(1,544,971)	28,537)	(795,524)	319,069)
Add: Tax savings from interest expense	55,630)	45,070)	37,024)	44,703)	50,475)	55,604)
Less: Tax imposed on investment income	4,475)	1,779)	4,334)	7,918)	3,661)	1,350)
Cash operating taxes	371,488)	385,676)	(316,612)	121,219)	403,869)	288,588)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

Provision (benefit) for income taxes: The provision for income taxes exhibits significant volatility across the observed periods. Initially, there was a positive provision amounting to 553,403 thousand USD in 2017, followed by a substantial negative provision of -438,469 thousand USD in 2018, indicating a tax benefit during that year. In 2019, the provision returned to a positive amount of 112,971 thousand USD. The year 2020 saw a drastic shift with a large tax benefit of -1,894,273 thousand USD, which is an anomaly compared to other years. Subsequently, the provision reverted to positive amounts, recording 677,251 thousand USD in 2021 and a slightly decreased but still substantial 516,517 thousand USD in 2022. Overall, these fluctuations suggest unpredictable tax outcomes, potentially influenced by changes in tax laws, one-time adjustments, or varying profitability impacts.
Cash operating taxes: Cash operating taxes generally demonstrate a more stable yet somewhat varied trend relative to the provision for income taxes. Starting at 288,588 thousand USD in 2017, there was a notable increase to 403,869 thousand USD in 2018. However, 2019 witnessed a sharp decline to 121,219 thousand USD, followed by a negative figure of -316,612 thousand USD in 2020, indicating a refund or tax credit situation in that year. In the subsequent years, 2021 and 2022, the amounts reverted to positive territory at 385,676 and 371,488 thousand USD, respectively, showing consistent tax payments in these periods. The pattern suggests that actual cash tax payments are subject to fluctuations, possibly reflecting timing differences, tax planning measures, or the impact of deferred tax assets and liabilities.

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AmerisourceBergen Corp., invested capital calculation (financing approach)

US$ in thousands

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Short-term debt	1,070,473)	300,213)	501,259)	139,012)	151,657)	12,121)
Long-term debt, net of current portion	4,632,360)	6,383,711)	3,618,261)	4,033,880)	4,158,532)	3,429,934)
Operating lease liability¹	1,022,472)	1,121,507)	478,094)	473,995)	446,301)	257,899)
Total reported debt & leases	6,725,305)	7,805,431)	4,597,614)	4,646,887)	4,756,490)	3,699,954)
Total AmerisourceBergen Corporation stockholders’ equity (deficit)	(211,559)	223,354)	(1,018,924)	2,878,917)	2,932,824)	2,064,461)
Net deferred tax (assets) liabilities²	1,382,842)	1,394,505)	324,845)	1,860,195)	1,829,410)	2,492,612)
Allowances for returns and credit losses³	1,626,729)	1,356,684)	1,417,308)	1,222,906)	1,036,333)	1,050,361)
LIFO reserve⁴	1,383,400)	1,316,200)	1,519,200)	1,511,800)	1,534,400)	1,467,000)
Equity equivalents⁵	4,392,971)	4,067,389)	3,261,353)	4,594,901)	4,400,143)	5,009,973)
Accumulated other comprehensive (income) loss, net of tax⁶	1,830,970)	445,442)	108,830)	111,965)	79,253)	95,850)
Noncontrolling interests	282,832)	361,057)	179,288)	114,289)	117,137)	—)
Adjusted total AmerisourceBergen Corporation stockholders’ equity (deficit)	6,295,214)	5,097,242)	2,530,547)	7,700,072)	7,529,357)	7,170,284)
Invested capital	13,020,519)	12,902,673)	7,128,161)	12,346,959)	12,285,847)	10,870,238)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

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 LIFO reserve. See details »

⁵ Addition of equity equivalents to total AmerisourceBergen Corporation stockholders’ equity (deficit).

⁶ Removal of accumulated other comprehensive income.

Total reported debt & leases: The total reported debt and leases exhibited a rising trend from 2017 to 2018, increasing from approximately 3.7 billion to 4.8 billion US dollars. This amount remained relatively stable in 2019 and 2020 around 4.6 billion before experiencing a significant spike in 2021, reaching approximately 7.8 billion. In 2022, the debt level decreased to about 6.7 billion, yet remained substantially higher than the levels observed prior to 2021.
Total stockholders’ equity (deficit): Stockholders' equity showed steady growth from 2017 to 2018, increasing from about 2.1 billion to 2.9 billion US dollars, and remained close to this level in 2019. However, there was a sharp decline in 2020, resulting in a deficit position of approximately -1.0 billion US dollars. The equity recovered slightly in 2021, reaching a positive 223 million, but reverted to a negative equity balance of approximately -212 million in 2022. This pattern reflects significant volatility and financial stress within the period analyzed.
Invested capital: Invested capital increased steadily from 2017 through 2019, rising from roughly 10.9 billion to 12.3 billion US dollars. In 2020, it declined sharply to about 7.1 billion, representing a significant reduction. The invested capital then rebounded notably in 2021, climbing back to approximately 12.9 billion, and showed marginal growth in 2022, reaching about 13.0 billion. This fluctuation indicates a substantial reallocation of capital resources particularly around 2020.

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AmerisourceBergen Corp., cost of capital calculations

Sep 30, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,875,680)	33,875,680)	÷	40,098,925)	=	0.84	0.84	×	11.67%	=	9.86%
Debt³	5,200,773)	5,200,773)	÷	40,098,925)	=	0.13	0.13	×	3.00% × (1 – 21.00%)	=	0.31%
Operating lease liability⁴	1,022,472)	1,022,472)	÷	40,098,925)	=	0.03	0.03	×	3.22% × (1 – 21.00%)	=	0.06%
Total:	40,098,925)					1.00					10.23%

Based on: 10-K (reporting date: 2022-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	25,737,771)	25,737,771)	÷	33,921,091)	=	0.76	0.76	×	11.67%	=	8.85%
Debt³	7,061,813)	7,061,813)	÷	33,921,091)	=	0.21	0.21	×	2.67% × (1 – 21.00%)	=	0.44%
Operating lease liability⁴	1,121,507)	1,121,507)	÷	33,921,091)	=	0.03	0.03	×	2.86% × (1 – 21.00%)	=	0.07%
Total:	33,921,091)					1.00					9.37%

Based on: 10-K (reporting date: 2021-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	20,813,049)	20,813,049)	÷	25,818,802)	=	0.81	0.81	×	11.67%	=	9.40%
Debt³	4,527,659)	4,527,659)	÷	25,818,802)	=	0.18	0.18	×	3.56% × (1 – 21.00%)	=	0.49%
Operating lease liability⁴	478,094)	478,094)	÷	25,818,802)	=	0.02	0.02	×	3.72% × (1 – 21.00%)	=	0.05%
Total:	25,818,802)					1.00					9.95%

Based on: 10-K (reporting date: 2020-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	18,082,027)	18,082,027)	÷	22,853,434)	=	0.79	0.79	×	11.67%	=	9.23%
Debt³	4,297,412)	4,297,412)	÷	22,853,434)	=	0.19	0.19	×	3.67% × (1 – 21.00%)	=	0.55%
Operating lease liability⁴	473,995)	473,995)	÷	22,853,434)	=	0.02	0.02	×	3.67% × (1 – 21.00%)	=	0.06%
Total:	22,853,434)					1.00					9.84%

Based on: 10-K (reporting date: 2019-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	18,834,530)	18,834,530)	÷	23,432,588)	=	0.80	0.80	×	11.67%	=	9.38%
Debt³	4,151,757)	4,151,757)	÷	23,432,588)	=	0.18	0.18	×	3.67% × (1 – 24.50%)	=	0.49%
Operating lease liability⁴	446,301)	446,301)	÷	23,432,588)	=	0.02	0.02	×	3.67% × (1 – 24.50%)	=	0.05%
Total:	23,432,588)					1.00					9.92%

Based on: 10-K (reporting date: 2018-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,328,800)	17,328,800)	÷	21,121,320)	=	0.82	0.82	×	11.67%	=	9.57%
Debt³	3,534,621)	3,534,621)	÷	21,121,320)	=	0.17	0.17	×	3.81% × (1 – 35.00%)	=	0.41%
Operating lease liability⁴	257,899)	257,899)	÷	21,121,320)	=	0.01	0.01	×	3.81% × (1 – 35.00%)	=	0.03%
Total:	21,121,320)					1.00					10.02%

Based on: 10-K (reporting date: 2017-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

AmerisourceBergen Corp., economic spread ratio calculation, comparison to benchmarks

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	1,060,686)	570,295)	(5,329,141)	(29,400)	(200,839)	(317,249)
Invested capital²	13,020,519)	12,902,673)	7,128,161)	12,346,959)	12,285,847)	10,870,238)
Performance Ratio
Economic spread ratio³	8.15%	4.42%	-74.76%	-0.24%	-1.63%	-2.92%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	-2.46%	-1.98%	—	—	—	—
Elevance Health Inc.	0.14%	1.46%	—	—	—	—
Intuitive Surgical Inc.	-3.34%	12.27%	—	—	—	—
Medtronic PLC	-5.09%	-6.73%	—	—	—	—
UnitedHealth Group Inc.	4.06%	3.91%	—	—	—	—

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,060,686 ÷ 13,020,519 = 8.15%

⁴ Click competitor name to see calculations.

The financial performance from 2017 to 2022 reflects a transition from consistent value destruction to a state of positive value creation. This period is characterized by a significant volatility event in 2020, followed by a rapid recovery and a strong upward trajectory in economic productivity through 2022.

Economic Profit: A persistent negative trend was observed between 2017 and 2019, although the magnitude of the loss narrowed from -317.2 million to -29.4 million. A severe anomaly occurred in 2020, where economic profit plummeted to -5.33 billion. However, a substantial turnaround followed, with the metric shifting to a positive 570.3 million in 2021 and further increasing to 1.06 billion by 2022, indicating that the entity began generating returns in excess of its cost of capital.
Invested Capital: Invested capital showed a general growth trend, rising from 10.87 billion in 2017 to 12.35 billion in 2019. A sharp contraction is evident in 2020, where capital dropped to 7.13 billion. This was followed by a rapid expansion back to 12.90 billion in 2021 and 13.02 billion in 2022, suggesting a significant capital restructuring or a major asset-related event during the 2020 fiscal year.
Economic Spread Ratio: The economic spread ratio mirrors the volatility and recovery seen in economic profit. The ratio improved steadily from -2.92% in 2017 to -0.24% in 2019, nearly reaching a break-even point. The collapse in 2020 resulted in a critical low of -74.76%. The subsequent recovery was aggressive, with the ratio turning positive at 4.42% in 2021 and nearly doubling to 8.15% by 2022, signaling a significant improvement in the efficiency of capital utilization and overall economic profitability.

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AmerisourceBergen Corp., economic profit margin calculation, comparison to benchmarks

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	1,060,686)	570,295)	(5,329,141)	(29,400)	(200,839)	(317,249)
Revenue	238,587,006)	213,988,843)	189,893,926)	179,589,121)	167,939,635)	153,143,826)
Performance Ratio
Economic profit margin²	0.44%	0.27%	-2.81%	-0.02%	-0.12%	-0.21%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	-3.45%	-2.85%	—	—	—	—
Elevance Health Inc.	0.06%	0.68%	—	—	—	—
Intuitive Surgical Inc.	-2.89%	9.66%	—	—	—	—
Medtronic PLC	-11.17%	-16.16%	—	—	—	—
UnitedHealth Group Inc.	2.08%	1.92%	—	—	—	—

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × 1,060,686 ÷ 238,587,006 = 0.44%

³ Click competitor name to see calculations.

The financial performance from 2017 to 2022 demonstrates a consistent expansion in revenue coupled with a volatile trajectory in economic value creation, culminating in a transition toward positive economic profit.

Revenue Growth: A sustained upward trend in revenue is observed, with values increasing from 153.1 billion US dollars in 2017 to 238.6 billion US dollars in 2022. This consistent growth indicates a steady expansion of the company's scale of operations over the six-year period.
Economic Profit Volatility: Economic profit remained negative from 2017 through 2020, signifying that returns were insufficient to cover the cost of capital. While the deficit narrowed between 2017 and 2019, a severe contraction occurred in 2020, where economic profit fell to negative 5.3 billion US dollars. A significant recovery followed, with the company pivoting to a positive economic profit of 570.3 million US dollars in 2021 and reaching 1.06 billion US dollars by 2022.
Economic Profit Margin Dynamics: The economic profit margin mirrors the volatility of the absolute economic profit. The margin improved from -0.21% in 2017 to nearly break-even at -0.02% in 2019, before experiencing a sharp decline to -2.81% in 2020. The subsequent shift to 0.27% in 2021 and 0.44% in 2022 indicates a fundamental change in value generation, where the company began producing returns in excess of its cost of capital relative to its revenue.

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AmerisourceBergen Corp. (NYSE:ABC)

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