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.
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Economic Profit
Boeing Co., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes shows a negative trend throughout the observed period. Starting at -8,306 million USD in 2020, it improved significantly to -2,649 million USD in 2021 but slightly worsened to -2,910 million USD in 2022. In 2023, NOPAT nearly reached breakeven at -77 million USD, indicating strong recovery. However, in 2024, there was a sharp decline to -10,234 million USD, representing the lowest performance in the period under review.
- Cost of Capital
- The cost of capital has demonstrated a gradual upward trend from 13.46% in 2020 to 15.24% in 2023, with a marginal decrease to 15.11% in 2024. This upward movement indicates increasing financing costs or risk premiums over time.
- Invested Capital
- Invested capital shows moderate fluctuations with an initial increase from 47,630 million USD in 2020 to a peak of 50,833 million USD in 2022. It then declined to 44,883 million USD in 2023 before rising again to 50,250 million USD in 2024. Overall, the invested capital remains relatively stable but exhibits some volatility.
- Economic Profit
- Economic profit remains consistently negative throughout the period, reflecting value destruction. The figure shows an improving trend from -14,717 million USD in 2020 to -6,919 million USD in 2023, signaling some recovery. Nevertheless, in 2024, economic profit deteriorated sharply to -17,828 million USD, exceeding the prior worst level of 2020.
- Summary and Insights
- The company experiences persistent operating losses as evidenced by the negative NOPAT figures throughout the five-year span, though with notable recovery phases in 2021 and 2023. The cost of capital's steady increase suggests rising external pressures on capital expenses, which could be contributing to financial strain. Invested capital values fluctuate but remain within a close range, indicating stable asset deployment with some variability. Economic profit data corroborates the pattern of ongoing value destruction, with temporary improvements offset by sharp setbacks in the latest year. The overall financial trends indicate challenges in achieving profitable operations and generating value exceeding the cost of capital, with significant deterioration in the most recent period that warrants attention.
Net Operating Profit after Taxes (NOPAT)
Boeing Co., NOPAT calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in valuation allowance.
3 Addition of increase (decrease) in product warranties.
4 Addition of increase (decrease) in equity equivalents to net loss attributable to Boeing Shareholders.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net loss attributable to Boeing Shareholders.
The analysis of the financial performance over the periods reveals fluctuating net losses and net operating profits after taxes (NOPAT) attributable to Boeing shareholders. Both metrics exhibit substantial variability, indicating challenges in sustaining profitability.
- Net Loss Attributable to Boeing Shareholders
- The net loss started at a high level of -11,873 million US dollars at the end of 2020. It improved considerably in 2021, reducing to -4,202 million, and then remained relatively stable yet negative at -4,935 million in 2022. Further improvement occurred in 2023, with the net loss decreasing to -2,222 million, suggesting a positive trend towards lower losses. However, this favorable trajectory reversed sharply by the end of 2024, with net loss escalating back to -11,817 million, nearly returning to the 2020 magnitude. This indicates renewed financial difficulties or one-time charges impacting the results in 2024.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT followed a similar pattern to net loss, starting at -8,306 million US dollars in 2020. It improved significantly through 2021 and 2022, reaching -2,649 million and -2,910 million respectively, reflecting reduced operating losses. By 2023, NOPAT almost breakeven at -77 million, suggesting nearly neutral operating profitability. However, in 2024, the measure deteriorated sharply to -10,234 million, indicating a substantial decline in operating performance and severe negative profitability in that year.
Overall, the data reflects a cyclical pattern with temporary improvements in operating and net losses through 2021 to 2023, followed by a marked deterioration in 2024. The sharp increase in losses during the most recent period highlights significant operational or market challenges that need to be addressed to restore financial stability and profitability.
Cash Operating Taxes
Boeing Co., cash operating taxes calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
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.
Invested Capital
Boeing Co., invested capital calculation (financing approach)
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
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’ deficit.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of investments, excluding Equity method investments.
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 $50.3 billion in 2024, almost reaching previous highs. This pattern implies fluctuating investment activities or asset base adjustments that may correlate with the trends in debt and equity.
In summary, the period is characterized by a deliberate reduction in debt levels with some recent increase, a highly volatile but ultimately improving shareholders’ deficit mainly in the last year, and a fluctuating invested capital base with recovery in the final reported period. These developments collectively indicate a dynamic financial position with potential strategic changes affecting capital structure and equity standing towards the end of the period.
Cost of Capital
Boeing Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 6.00% Series A Mandatory Convertible Preferred Stock | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations and commercial paper3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ 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 | ÷ | = | × | = | |||||||||
| 6.00% Series A Mandatory Convertible Preferred Stock | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations and commercial paper3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| 6.00% Series A Mandatory Convertible Preferred Stock | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations and commercial paper3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| 6.00% Series A Mandatory Convertible Preferred Stock | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations and commercial paper3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 6.00% Series A Mandatory Convertible Preferred Stock | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations and commercial paper3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends in key financial metrics. The economic profit has displayed considerable fluctuation, initially showing a negative value of -14,717 million US dollars at the end of 2020, which improved to -9,574 million US dollars by the end of 2021. However, this improvement was not sustained, with economic profit worsening again to -10,575 million US dollars in 2022, followed by a partial recovery to -6,919 million US dollars in 2023, and then a significant decline to -17,828 million US dollars in 2024. This pattern indicates ongoing challenges in generating economic profit, with a recent steep deterioration.
The invested capital has remained relatively stable, fluctuating within a narrow range during the period analyzed. It started at 47,630 million US dollars at the end of 2020, showing moderate increases to 49,413 million in 2021 and 50,833 million in 2022, followed by a decrease to 44,883 million in 2023, and then an increase again to 50,250 million US dollars in 2024. This pattern suggests that there were some adjustments in the capital employed, but overall, invested capital did not experience extreme volatility.
The economic spread ratio consistently reflected negative values throughout the time frame, indicating that the returns did not exceed the cost of capital. The ratio improved from -30.9% at the end of 2020 to -19.38% in 2021, suggesting some enhancement in value creation relative to invested capital costs. However, this was followed by a decline to -20.8% in 2022, a subsequent improvement to -15.42% in 2023, and a marked deterioration to -35.48% in 2024. This trend corresponds closely with the fluctuations observed in economic profit, signaling volatility in the profitability and economic efficiency of the invested capital.
- Summary of Trends
- - Economic profit has been persistently negative with periods of relative improvement and decline, culminating in a sharp decrease in 2024.
- - Invested capital showed moderate fluctuations but remained within a relatively stable range over the five years.
- - The economic spread ratio remained negative, indicating an ongoing failure to generate returns above capital costs, with marked volatility paralleling economic profit changes.
Overall, the data reflect continued operational and financial challenges, with economic profitability being particularly weak and volatile despite a relatively steady level of invested capital. The downward trend in economic profit and the economic spread ratio in the most recent year suggests heightened pressures on financial performance and capital efficiency.
Economic Profit Margin
Boeing Co., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit showed significant fluctuations over the analyzed period. Beginning with a substantial negative value of -14,717 million US dollars in 2020, it improved notably in 2021 to -9,574 million and slightly worsened in 2022 to -10,575 million. A notable recovery was observed in 2023, with economic profit reaching -6,919 million. However, in 2024, there was a sharp decline, returning to a highly negative economic profit of -17,828 million, the lowest point in the five-year span.
- Revenues
- Revenue figures exhibited a general upward trend from 2020 through 2023, rising from 58,158 million US dollars in 2020 to a peak of 77,794 million in 2023. This reflects a strong growth in sales or production capacity. However, in 2024, revenues declined significantly to 66,517 million, indicating a reversal of the prior growth trend and suggesting potential challenges faced by the company during the last year.
- Economic Profit Margin
- The economic profit margin, expressed as a percentage, consistently remained negative throughout the period. The margin improved from -25.3% in 2020 to a less negative -8.89% in 2023, signaling increased efficiency or better cost management in those years. Nevertheless, 2024 saw a severe deterioration in the margin to -26.8%, closely matching the initial poor performance in 2020 and indicating a significant loss in profitability relative to revenues.
- Overall Trends and Insights
- The data reflects a challenging financial environment, with persistent economic losses despite increasing revenues for most of the period. Improvements seen from 2020 through 2023 in both economic profit and margin suggest some operational or market improvements. However, the sharp declines in 2024 for both revenues and economic profit indicators point to either escalating costs, unfavorable market conditions, or other adverse factors impacting profitability. The divergence between revenue growth and economic profit losses highlights potential issues in cost control, capital costs, or other economic factors reducing overall value creation.