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 – 15.56% × 53,662 = -3,103
The analysis of economic profit from 2021 to 2025 reveals a period of sustained value destruction, as economic profit remained negative throughout the entire duration. While there is a significant recovery in the final year, the entity consistently failed to generate returns sufficient to cover its cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited extreme volatility over the five-year period. Following initial losses in 2021 and 2022, a near-break-even point was reached in 2023. This was followed by a sharp decline in 2024, where losses widened to 10,234 million. A substantial reversal occurred in 2025, with NOPAT turning positive at 5,245 million.
- Cost of Capital
- A consistent upward trend in the cost of capital is observed, rising from 13.66% in 2021 to 15.56% by 2025. This steady increase indicates a rising threshold for value creation, making it progressively more difficult to achieve a positive economic profit.
- Invested Capital
- Invested capital remained relatively stable, fluctuating around the 50 billion mark. A temporary contraction occurred in 2023, dropping to 44,905 million, before increasing steadily to reach a peak of 53,662 million in 2025.
- Economic Profit
- Economic profit remained negative across all reported years, signifying that the return on invested capital was lower than the cost of capital. The deficit peaked in 2024 at -17,638 million, driven by the simultaneous occurrence of deep operating losses and a high capital base. Although 2025 showed a marked improvement to -3,103 million, the result remains negative, indicating that economic value is still being eroded despite the return to positive NOPAT.
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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$53,662 million in 2025, driven by the improvement in shareholders’ equity and the stabilization of debt levels. The overall trend suggests a period of capital contraction followed by a recovery and expansion.
The substantial shift in shareholders’ equity is a key driver of the changes observed in invested capital. The company’s ability to move from a significant deficit to a positive equity position represents a notable financial achievement and supports the increase in invested capital observed in the later years of the period.
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Cost of Capital
Boeing Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 183,551) | 183,551) | ÷ | 247,779) | = | 0.74 | 0.74 | × | 19.47% | = | 14.42% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | 7,942) | 7,942) | ÷ | 247,779) | = | 0.03 | 0.03 | × | 6.00% | = | 0.19% | ||
| Debt, including finance lease obligations and commercial paper3 | 54,019) | 54,019) | ÷ | 247,779) | = | 0.22 | 0.22 | × | 5.31% × (1 – 21.00%) | = | 0.91% | ||
| Operating lease liability4 | 2,267) | 2,267) | ÷ | 247,779) | = | 0.01 | 0.01 | × | 3.97% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 247,779) | 1.00 | 15.56% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | × | 19.47% | = | 13.36% | ||
| 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 | 14.73% | ||||||||||
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 | × | 19.47% | = | 13.78% | ||
| 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 | 14.85% | ||||||||||
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 | × | 19.47% | = | 13.59% | ||
| 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 | 14.69% | ||||||||||
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 | × | 19.47% | = | 12.34% | ||
| 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 | 13.66% | ||||||||||
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 | (3,103) | (17,638) | (6,745) | (10,382) | (9,407) | |
| Invested capital2 | 53,662) | 50,271) | 44,905) | 50,866) | 49,465) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -5.78% | -35.09% | -15.02% | -20.41% | -19.02% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Caterpillar Inc. | -6.98% | -2.40% | -2.46% | -6.38% | -5.78% | |
| Eaton Corp. plc | -5.04% | -6.22% | -7.80% | -9.70% | -9.31% | |
| GE Aerospace | 3.23% | -0.65% | 1.17% | -13.77% | -18.68% | |
| Honeywell International Inc. | -4.85% | -3.88% | -2.02% | -3.00% | -1.91% | |
| Lockheed Martin Corp. | 13.05% | 12.02% | 18.47% | 14.50% | 15.48% | |
| RTX Corp. | -0.61% | -2.75% | -4.51% | -4.53% | -4.01% | |
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 × -3,103 ÷ 53,662 = -5.78%
4 Click competitor name to see calculations.
The analysis of economic value added reveals a period of consistent value destruction, characterized by negative economic profit and a negative economic spread ratio from 2021 through 2025. While the magnitude of value erosion fluctuated, the most significant deterioration occurred in 2024, followed by a notable recovery toward the end of the period.
- Economic Profit
- A persistent negative trend is observed, indicating that operating returns were insufficient to cover the cost of capital. Economic profit fluctuated from -9,407 million USD in 2021 to a period low of -17,638 million USD in 2024. However, a substantial recovery was recorded by December 31, 2025, where the deficit narrowed to -3,103 million USD.
- Invested Capital
- The capital base remained relatively stable, oscillating between a minimum of 44,905 million USD in 2023 and a maximum of 53,662 million USD in 2025. The data shows a slight contraction in 2023 followed by a steady increase in invested capital over the subsequent two years.
- Economic Spread Ratio
- The economic spread ratio remained negative throughout the analyzed timeframe, confirming that the return on invested capital was consistently lower than the cost of capital. This ratio mirrored the volatility of the economic profit, reaching a critical low of -35.09% in 2024. By 2025, the ratio improved to -5.78%, representing the narrowest spread in the five-year period and indicating a trend toward economic break-even.
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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 | (3,103) | (17,638) | (6,745) | (10,382) | (9,407) | |
| Revenues | 89,463) | 66,517) | 77,794) | 66,608) | 62,286) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -3.47% | -26.52% | -8.67% | -15.59% | -15.10% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Caterpillar Inc. | -7.05% | -2.25% | -2.14% | -6.18% | -6.67% | |
| Eaton Corp. plc | -6.35% | -7.99% | -10.56% | -14.39% | -13.98% | |
| GE Aerospace | 2.95% | -0.70% | 0.91% | -12.49% | -18.86% | |
| Honeywell International Inc. | -7.87% | -6.08% | -2.67% | -3.95% | -2.67% | |
| Lockheed Martin Corp. | 5.28% | 4.87% | 7.50% | 5.85% | 6.61% | |
| RTX Corp. | -0.75% | -3.66% | -7.09% | -7.43% | -6.96% | |
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 × -3,103 ÷ 89,463 = -3.47%
3 Click competitor name to see calculations.
The analysis of economic value added indicates a consistent period of negative economic profit from 2021 through 2025, signifying that operating returns remained below the cost of capital throughout the period. Despite the persistent losses, the data reveals significant volatility and a strong recovery trend toward the end of the timeframe.
- Economic Profit Trends
- Economic profit exhibited substantial fluctuations, beginning with a loss of -9,407 million in 2021 and widening to -10,382 million in 2022. A period of improvement followed in 2023 with losses narrowing to -6,745 million, before a severe deterioration in 2024, where losses reached a peak of -17,638 million. A significant recovery is observed in 2025, with the economic loss reduced to its lowest level in the period at -3,103 million.
- Revenue Performance
- Revenues demonstrated an overall growth trajectory, rising from 62,286 million in 2021 to a peak of 89,463 million in 2025. A notable contraction occurred in 2024, where revenues fell to 66,517 million, coinciding with the most significant drop in economic profit. The subsequent surge in revenue in 2025 appears strongly correlated with the narrowing of the economic loss.
- Economic Profit Margin Analysis
- The economic profit margin reflects the volatility of the underlying financial performance. The margin remained relatively stable between -15.10% in 2021 and -15.59% in 2022, before improving to -8.67% in 2023. The most acute margin compression occurred in 2024, dropping to -26.52%, which represents the lowest point of economic efficiency in the observed period. By 2025, the margin recovered sharply to -3.47%, indicating a substantial reduction in the gap between the company's returns and its cost of capital.
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