Boeing Co. (NYSE:BA)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows a highly negative trend throughout the periods analyzed. The company experienced significant losses every year, with values ranging from -8,306 million USD in 2020 to -10,234 million USD in 2024. Although there was some improvement in 2023 (-77 million USD), the subsequent increase in losses in 2024 indicates volatility and challenges in achieving profitability.

Cost of Capital

The cost of capital increased steadily from 13.68% in 2020 to a peak of 15.51% in 2023, slightly declining to 15.37% in 2024. This rising trend suggests increased risk or higher required returns expected by investors during this period.

Invested Capital

Invested capital rose gradually from 47,630 million USD in 2020 to 50,250 million USD in 2024, with a dip observed in 2023 (44,883 million USD). The overall pattern indicates ongoing investment in the business, despite fluctuations possibly related to operational adjustments or asset management policies.

Economic Profit

Economic profit remained deeply negative in all years. The losses decreased from -14,824 million USD in 2020 to -7,038 million USD in 2023, suggesting some improvement. However, the sharp increase in losses to -17,956 million USD in 2024 marks a significant setback, highlighting sustained inability to generate returns above the cost of capital.

Net Loss Attributable to Boeing Shareholders

From 2020 to 2024, the net loss attributable to shareholders exhibits significant volatility. The year 2020 shows the highest loss at -$11,873 million, followed by an improvement in 2021 to -$4,202 million. However, this positive trend does not sustain as losses increase again to -$4,935 million in 2022. The year 2023 marks notable recovery with losses drastically reduced to -$2,222 million, yet this improvement is reversed sharply in 2024 with losses escalating back to near the 2020 level at -$11,817 million.

Net Operating Profit After Taxes (NOPAT)

Similarly, NOPAT reflects a challenging operating environment across the indicated periods. The highest negative NOPAT is recorded in 2020 at -$8,306 million. There is consistent improvement in subsequent years, reaching a near-breakeven point in 2023 with a loss of only -$77 million. This suggests operational efficiencies or recovery efforts during that period. However, in 2024, NOPAT deteriorates severely, plummeting to -$10,234 million, indicating a substantial decline in operating profitability after taxes.

The financial data reveals fluctuating trends in both income tax expense (benefit) and cash operating taxes over the five-year period ending December 31, 2024.

Income Tax Expense (Benefit)

This item exhibits significant variability throughout the period. In 2020, a substantial tax benefit is seen with a negative value of -2535 million US dollars. The benefit decreases in magnitude in 2021 to -743 million and then transitions to a small positive tax expense of 31 million in 2022. The expense increases further to 237 million in 2023, before again shifting to a tax benefit of -381 million in 2024. This pattern indicates inconsistent tax charges, possibly reflecting changes in profitability, tax regulations, or adjustments in deferred tax assets and liabilities.

Cash Operating Taxes

Cash operating taxes also display considerable variation, but with a distinct pattern compared to income tax expense. In 2020, there is a significant tax benefit of -3337 million US dollars. This value reverses direction in subsequent years, with positive cash taxes of 676 million in 2021, then slightly decreasing to 588 million in 2022. The cash tax outflows increase to 736 million in 2023, before declining to 508 million in 2024. The overall trend suggests initial tax credit or refund receipt in 2020, followed by consistent cash tax payments in later years, albeit with some fluctuation.

In summary, the data portrays a volatile tax environment with marked fluctuations between tax benefits and expenses, as well as cash tax payments over the analyzed period. The initial years show net tax benefits, while the subsequent years reflect more traditional tax expense and cash outflows, indicating changes in earnings or tax management strategies.

The financial data reveals notable trends in debt, shareholders' equity, and invested capital over the five-year period ending in 2024.

Total reported debt & leases

There is a general decline observed in the total reported debt and leases. Beginning at approximately $64.9 billion in 2020, the amount decreases steadily to about $54.1 billion in 2023, followed by a slight increase to $55.9 billion in 2024. This trend indicates an overall effort to reduce debt obligations over the period, with a minor uptick in the most recent year.

Shareholders’ deficit

The shareholders’ deficit shows significant volatility during the timeframe. Starting from a deficit of $18.3 billion in 2020, the figure improves to $15.0 billion in 2021, worsens again to $15.9 billion in 2022, and further deteriorates to $17.2 billion in 2023. However, there is a remarkable improvement in 2024 when the deficit reduces substantially to $3.9 billion. This sharp recovery in 2024 suggests a significant positive development in equity, potentially reflecting operational improvements or revaluation effects.

Invested capital

Invested capital increases gradually from $47.6 billion in 2020 to a peak of $50.8 billion in 2022. In 2023, a noticeable decline occurs, bringing invested capital down to $44.9 billion. Subsequently, it rebounds to $50.3 billion in 2024, almost reaching previous highs. This pattern implies fluctuating investment activities or asset base adjustments that may correlate with the trends in debt and equity.

In summary, the period is characterized by a deliberate reduction in debt levels with some recent increase, a highly volatile but ultimately improving shareholders’ deficit mainly in the last year, and a fluctuating invested capital base with recovery in the final reported period. These developments collectively indicate a dynamic financial position with potential strategic changes affecting capital structure and equity standing towards the end of the period.

Economic Profit Trend

The economic profit has fluctuated over the five-year period, with negative values reported consistently. Initially, a significant loss of 14,824 million US dollars was observed at the end of 2020, followed by an improvement in 2021 to a loss of 9,691 million US dollars. However, the economic profit deteriorated again in 2022 to negative 10,707 million US dollars, then improved moderately in 2023 to negative 7,038 million US dollars. Notably, there was a sharp decline in 2024, with the economic profit reaching its lowest point at a negative 17,956 million US dollars, indicating worsening profitability despite previous improvements.

Invested Capital Changes

Invested capital showed a general upward trend from 2020 to 2024, though with some fluctuations. It increased from 47,630 million US dollars in 2020 to a peak of 50,833 million in 2022. A decline occurred in 2023, where invested capital dropped to 44,883 million US dollars, but it rebounded to 50,250 million US dollars in 2024. The overall movement suggests ongoing investment, with a temporary reduction in 2023 before increased capital allocation in the following year.

Economic Spread Ratio Analysis

The economic spread ratio, representing the return relative to invested capital, consistently remained negative throughout the five years, reflecting an inability to generate returns above the cost of capital. The ratio improved from a severely negative -31.12% in 2020 to a less negative -19.61% in 2021. A slight decline in performance occurred in 2022 (-21.06%), followed by a partial recovery in 2023 to -15.68%. However, the ratio deteriorated sharply to -35.73% in 2024, the worst figure in the period, exacerbating concerns about the company’s efficiency in utilizing its invested capital to generate economic value.

Summary of Insights

Overall, the data indicates persistent challenges in achieving positive economic profit, with all years reporting losses and a worsening situation by 2024. Despite a generally increasing level of invested capital, the returns on investment have been insufficient, as reflected in the consistently negative economic spread ratio. The brief improvements seen in 2021 and 2023 were not sustained, culminating in a significant downturn in 2024. This pattern suggests issues related to profitability management and capital efficiency, necessitating review and strategic adjustments to improve economic performance and capital utilization going forward.

Revenue Trends

Revenues exhibited an overall increasing trend from 2020 to 2023, rising from $58,158 million to $77,794 million. However, in 2024, revenues declined substantially to $66,517 million, representing a notable decrease from the previous year.

Economic Profit Analysis

Economic profit remained negative throughout the period, indicating persistent economic losses. While the losses reduced somewhat from 2020 to 2023, moving from -$14,824 million to -$7,038 million, the economic profit worsened sharply in 2024, plunging to -$17,956 million, the lowest in the period observed.

Economic Profit Margin Dynamics

Consistent with economic profit, the economic profit margin was negative across all years. It improved steadily from -25.49% in 2020 to -9.05% in 2023, reflecting less severe economic losses relative to revenues. In 2024, the margin deteriorated markedly to -26.99%, signaling a significant decline in profitability relative to revenue.

Overall Insights

The data suggests that while revenue growth persisted until 2023 with gradual improvement in economic profitability, 2024 marked a period of sharp financial deterioration. Both economic profit and its margin worsened considerably despite revenues remaining relatively high compared to earlier years. This divergence implies increased costs, inefficiencies, or other factors adversely impacting economic returns despite revenue levels.