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.
Economic Profit
Boeing Co., economic profit 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 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
= 5,245 – 15.57% × 53,662 = -3,108
The analysis of economic profit over the five-year period from 2021 to 2025 reveals a consistent destruction of shareholder value, as economic profit remained negative throughout the entire duration. While there are fluctuations in operating performance, the returns generated have been insufficient to cover the cost of the capital employed.
- Net Operating Profit After Taxes (NOPAT)
- A high degree of volatility is observed in NOPAT. Following losses in 2021 and 2022, there was a significant recovery in 2023 where losses were nearly eliminated. However, this was followed by a severe contraction in 2024, with NOPAT dropping to its lowest point of negative 10,234 million US$. A sharp reversal occurred in 2025, with NOPAT turning positive at 5,245 million US$, indicating a return to operational profitability.
- Cost of Capital
- The cost of capital exhibits a general upward trend, rising from 13.67% in 2021 to a peak of 15.57% in 2025. This steady increase raises the threshold for the return required to achieve a positive economic profit, thereby intensifying the pressure on operating margins to generate higher absolute returns.
- Invested Capital
- Invested capital remained relatively stable, fluctuating between approximately 44.9 billion and 53.7 billion US$. A temporary decline was noted in 2023, followed by a steady increase through 2025. The growth in the capital base, combined with the rising cost of capital, has increased the total capital charge the company must overcome to generate economic value.
- Economic Profit
- Economic profit remained negative for the entire period, reflecting a systemic failure to generate returns exceeding the cost of capital. The most significant value destruction occurred in 2024, where economic profit reached a nadir of negative 17,642 million US$, driven by the combination of severe operating losses and a high capital charge. Despite the return to a positive NOPAT in 2025, the economic profit remained negative at 3,108 million US$, as the operating profit was still insufficient to offset the 15.57% cost of the 53,662 million US$ invested capital.
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Net Operating Profit after Taxes (NOPAT)
Boeing Co., 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 allowances for expected credit losses.
3 Addition of increase (decrease) in product warranties.
4 Addition of increase (decrease) in equity equivalents to net earnings (loss) attributable to Boeing shareholders.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 2,267 × 3.97% = 90
6 2025 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= 2,861 × 21.00% = 601
7 Addition of after taxes interest expense to net earnings (loss) attributable to Boeing shareholders.
The financial performance, as indicated by Net Earnings attributable to Boeing shareholders and Net Operating Profit After Taxes (NOPAT), demonstrates significant volatility over the five-year period. Both metrics experienced substantial fluctuations, transitioning from negative values to positive in the final year examined.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a generally negative trend from 2021 to 2023, starting at -US$2,649 million, decreasing to -US$2,910 million, and then reaching -US$77 million. A dramatic decline occurred in 2024, with NOPAT falling to -US$10,234 million. However, a substantial recovery is observed in 2025, with NOPAT reaching a positive US$5,245 million. This represents a significant turnaround from the preceding year’s loss.
The movement in NOPAT closely mirrors the trend in Net Earnings attributable to Boeing shareholders. Both metrics show considerable losses in 2021, 2022, and 2024, followed by a return to profitability in 2025. The magnitude of the loss in 2024 for both metrics is notably larger than in the prior loss-making years.
- Relationship between NOPAT and Net Earnings
- While both metrics move in the same direction, the absolute values differ. Net Earnings consistently report larger losses than NOPAT in 2021, 2022, and 2024. This suggests that factors outside of core operating performance, such as financing costs or non-operating items, are contributing to the overall net loss. The difference between the two metrics narrows in 2023 and reverses in 2025, indicating a stronger correlation between operating performance and overall profitability in the final year.
The substantial shift to positive NOPAT in 2025 suggests a potential improvement in operational efficiency or a favorable change in the business environment. Further investigation would be required to determine the specific drivers behind this turnaround.
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Cash Operating Taxes
Boeing Co., cash operating taxes calculation
US$ 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 relationship between income tax expense and cash operating taxes demonstrates notable fluctuations over the five-year period. A significant divergence is apparent between reported income tax expense and the actual cash outflow for taxes.
- Income Tax Expense
- Income tax expense exhibits considerable volatility. A substantial benefit was recorded in 2021, followed by relatively small expenses in 2022 and 2023. A significant expense was then reported in 2024, before returning to a positive expense in 2025, though not reaching the level of 2023.
- Cash Operating Taxes
- Cash operating taxes demonstrate a generally increasing trend, despite yearly variations. Values rose from 676 in 2021 to 736 in 2023, experienced a decrease to 508 in 2024, and then increased substantially to 899 in 2025. This suggests a consistent, underlying tax obligation, with fluctuations potentially related to timing differences or tax planning strategies.
- Relationship between Income Tax Expense and Cash Taxes
- The difference between income tax expense and cash operating taxes is substantial in each year. The 2021 benefit in income tax expense contrasts sharply with the 676 million in cash taxes paid, indicating deferred tax liabilities were likely being reduced. The divergence continues in subsequent years, suggesting ongoing differences between book and tax accounting methods. The largest difference is observed in 2024, where a significant income tax expense is offset by a lower cash tax payment.
The consistent positive values for cash operating taxes, even during periods of reported income tax benefits, suggest the entity consistently remits cash for tax obligations. The fluctuations in income tax expense likely reflect the impact of temporary differences, tax credits, or changes in tax laws, while cash taxes represent the actual cash outflows for tax liabilities.
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Invested Capital
Boeing Co., 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 product warranties.
5 Addition of equity equivalents to shareholders’ equity (deficit).
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of investments, excluding Equity method investments and Restricted cash & cash equivalents.
The invested capital of the company exhibited fluctuations over the five-year period. Total reported debt & leases generally decreased before increasing again, while shareholders’ equity experienced a significant shift from a substantial deficit to a positive value. These movements collectively influenced the overall trend in invested capital.
- Total Reported Debt & Leases
- Total reported debt & leases decreased from US$59,641 million in 2021 to US$54,121 million in 2023, representing a reduction of approximately 9.3%. However, it then increased to US$55,958 million in 2024 and further to US$56,365 million in 2025. This suggests a period of debt reduction followed by renewed borrowing or lease obligations.
- Shareholders’ Equity (Deficit)
- Shareholders’ equity began as a significant deficit of US$-14,999 million in 2021 and continued to worsen, reaching a deficit of US$-17,233 million in 2023. A dramatic turnaround occurred in 2024, with the deficit substantially reduced to US$-3,908 million. By 2025, shareholders’ equity had become positive, reaching US$5,454 million. This indicates a significant improvement in the company’s net asset position.
- Invested Capital
- Invested capital initially increased from US$49,465 million in 2021 to US$50,866 million in 2022, a rise of approximately 2.8%. It then decreased to US$44,905 million in 2023, coinciding with the continued negative shareholders’ equity. Invested capital rebounded in 2024 to US$50,271 million and continued to rise to US$53,662 million in 2025, driven by the improvement in shareholders’ equity and the stabilization of debt levels. The overall trend suggests a period of capital contraction followed by a recovery and expansion.
The substantial shift in shareholders’ equity is a key driver of the changes observed in invested capital. The company’s ability to move from a significant deficit to a positive equity position represents a notable financial achievement and supports the increase in invested capital observed in the later years of the period.
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Cost of Capital
Boeing Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 183,551) | 183,551) | ÷ | 247,779) | = | 0.74 | 0.74 | × | 19.48% | = | 14.43% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | 7,942) | 7,942) | ÷ | 247,779) | = | 0.03 | 0.03 | × | 6.00% | = | 0.19% | ||
| Debt, including finance lease obligations and commercial paper3 | 54,019) | 54,019) | ÷ | 247,779) | = | 0.22 | 0.22 | × | 5.31% × (1 – 21.00%) | = | 0.91% | ||
| Operating lease liability4 | 2,267) | 2,267) | ÷ | 247,779) | = | 0.01 | 0.01 | × | 3.97% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 247,779) | 1.00 | 15.57% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations and commercial paper. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 131,916) | 131,916) | ÷ | 192,171) | = | 0.69 | 0.69 | × | 19.48% | = | 13.37% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | 6,833) | 6,833) | ÷ | 192,171) | = | 0.04 | 0.04 | × | 6.00% | = | 0.21% | ||
| Debt, including finance lease obligations and commercial paper3 | 51,328) | 51,328) | ÷ | 192,171) | = | 0.27 | 0.27 | × | 5.32% × (1 – 21.00%) | = | 1.12% | ||
| Operating lease liability4 | 2,094) | 2,094) | ÷ | 192,171) | = | 0.01 | 0.01 | × | 3.43% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 192,171) | 1.00 | 14.74% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations and commercial paper. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 128,763) | 128,763) | ÷ | 181,869) | = | 0.71 | 0.71 | × | 19.48% | = | 13.79% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | —) | —) | ÷ | 181,869) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt, including finance lease obligations and commercial paper3 | 51,292) | 51,292) | ÷ | 181,869) | = | 0.28 | 0.28 | × | 4.67% × (1 – 21.00%) | = | 1.04% | ||
| Operating lease liability4 | 1,814) | 1,814) | ÷ | 181,869) | = | 0.01 | 0.01 | × | 3.21% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 181,869) | 1.00 | 14.86% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations and commercial paper. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 126,330) | 126,330) | ÷ | 180,973) | = | 0.70 | 0.70 | × | 19.48% | = | 13.60% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | —) | —) | ÷ | 180,973) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt, including finance lease obligations and commercial paper3 | 53,062) | 53,062) | ÷ | 180,973) | = | 0.29 | 0.29 | × | 4.62% × (1 – 21.00%) | = | 1.07% | ||
| Operating lease liability4 | 1,581) | 1,581) | ÷ | 180,973) | = | 0.01 | 0.01 | × | 4.13% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 180,973) | 1.00 | 14.70% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations and commercial paper. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 116,740) | 116,740) | ÷ | 184,183) | = | 0.63 | 0.63 | × | 19.48% | = | 12.35% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | —) | —) | ÷ | 184,183) | = | 0.00 | 0.00 | × | 0.00% | = | 0.00% | ||
| Debt, including finance lease obligations and commercial paper3 | 65,904) | 65,904) | ÷ | 184,183) | = | 0.36 | 0.36 | × | 4.59% × (1 – 21.00%) | = | 1.30% | ||
| Operating lease liability4 | 1,539) | 1,539) | ÷ | 184,183) | = | 0.01 | 0.01 | × | 3.82% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 184,183) | 1.00 | 13.67% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations and commercial paper. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Boeing Co., 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 | (3,108) | (17,642) | (6,749) | (10,386) | (9,410) | |
| Invested capital2 | 53,662) | 50,271) | 44,905) | 50,866) | 49,465) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -5.79% | -35.09% | -15.03% | -20.42% | -19.02% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Caterpillar Inc. | -7.01% | -2.43% | -2.49% | -6.41% | -5.81% | |
| Eaton Corp. plc | -5.06% | -6.23% | -7.81% | -9.71% | -9.32% | |
| GE Aerospace | 3.20% | -0.68% | 1.15% | -13.79% | -18.70% | |
| Honeywell International Inc. | -4.85% | -3.88% | -2.02% | -2.99% | -1.90% | |
| Lockheed Martin Corp. | 13.09% | 12.07% | 18.52% | 14.55% | 15.53% | |
| RTX Corp. | -0.57% | -2.71% | -4.48% | -4.50% | -3.98% | |
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 × -3,108 ÷ 53,662 = -5.79%
4 Click competitor name to see calculations.
The analysis of economic value added reveals a consistent period of negative economic profit from 2021 through 2025, indicating that the entity did not generate returns in excess of its cost of capital during this timeframe.
- Economic Profit Trends
- Economic profit remained negative throughout the analyzed period, exhibiting significant volatility. A modest improvement was noted in 2023; however, this was followed by a substantial decline in 2024, where economic profit reached its lowest point at -17,642 million US dollars. A notable recovery is observed by the end of 2025, with the loss narrowing significantly to -3,108 million US dollars.
- Invested Capital Dynamics
- Invested capital demonstrated relative stability with a general upward trajectory over the five-year span. Following a dip to 44,905 million US dollars in 2023, the capital base expanded to 53,662 million US dollars by 2025. This suggests a continued commitment to capital investment despite the lack of positive economic profit.
- Economic Spread Ratio Performance
- The economic spread ratio mirrors the volatility of the economic profit, reflecting the inefficiency of capital utilization relative to the cost of capital. The ratio moved from -19.02% in 2021 to a critical low of -35.09% in 2024, marking the period of peak value erosion. A significant reversal occurred in 2025, with the ratio improving to -5.79%, which indicates a substantial narrowing of the spread deficit and a movement toward economic breakeven.
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Economic Profit Margin
Boeing Co., 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 | (3,108) | (17,642) | (6,749) | (10,386) | (9,410) | |
| Revenues | 89,463) | 66,517) | 77,794) | 66,608) | 62,286) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -3.47% | -26.52% | -8.68% | -15.59% | -15.11% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Caterpillar Inc. | -7.09% | -2.28% | -2.17% | -6.21% | -6.70% | |
| Eaton Corp. plc | -6.36% | -8.00% | -10.58% | -14.41% | -14.00% | |
| GE Aerospace | 2.93% | -0.73% | 0.89% | -12.50% | -18.88% | |
| Honeywell International Inc. | -7.87% | -6.07% | -2.66% | -3.95% | -2.66% | |
| Lockheed Martin Corp. | 5.29% | 4.89% | 7.52% | 5.86% | 6.63% | |
| RTX Corp. | -0.70% | -3.61% | -7.05% | -7.38% | -6.91% | |
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 ÷ Revenues
= 100 × -3,108 ÷ 89,463 = -3.47%
3 Click competitor name to see calculations.
The analysis of economic value added indicates a period of consistent value destruction, as economic profit remained negative from 2021 through 2025. While there is a general trajectory toward recovery by the end of the period, the intervening years exhibit significant volatility in both absolute economic profit and the corresponding profit margin.
- Revenue Performance
- Revenues demonstrated an upward trend from 2021 to 2023, peaking at 77,794 million before experiencing a contraction in 2024 to 66,517 million. A substantial recovery is noted in 2025, with revenues reaching a period high of 89,463 million.
- Economic Profit Trends
- Economic profit remained in negative territory throughout the analyzed timeframe. A moderate improvement was observed in 2023, where losses narrowed to -6,749 million, followed by a severe decline in 2024, with losses widening to -17,642 million. The period concludes with a significant reduction in economic loss, reaching -3,108 million in 2025.
- Economic Profit Margin Volatility
- The economic profit margin mirrors the instability of the underlying financial performance. The margin remained relatively stable between 2021 (-15.11%) and 2022 (-15.59%) before improving to -8.68% in 2023. A sharp deterioration occurred in 2024, with the margin falling to -26.52%, marking the lowest point of the period. By 2025, the margin showed a strong recovery, narrowing to -3.47%.
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