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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

Boeing Co., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	(77)	(2,910)	(2,649)	(8,306)	(1,241)
Cost of capital²	14.17%	14.02%	13.05%	12.53%	16.33%
Invested capital³	44,883)	50,833)	49,413)	47,630)	35,543)

Economic profit⁴	(6,436)	(10,035)	(9,098)	(14,276)	(7,045)

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -77 – 14.17% × 44,883 = -6,436

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Boeing Co. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Boeing Co., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net loss attributable to Boeing Shareholders	(2,222)	(4,935)	(4,202)	(11,873)	(636)
Deferred income tax expense (benefit)¹	30)	(11)	(843)	1,264)	(1,323)
Increase (decrease) in valuation allowance²	(27)	(274)	(54)	371)	16)
Increase (decrease) in product warranties³	173)	375)	373)	260)	140)
Increase (decrease) in equity equivalents⁴	176)	90)	(524)	1,895)	(1,167)
Interest and debt expense	2,459)	2,533)	2,682)	2,156)	722)
Interest expense, operating lease liability⁵	58)	65)	59)	46)	41)
Adjusted interest and debt expense	2,517)	2,598)	2,741)	2,202)	763)
Tax benefit of interest and debt expense⁶	(529)	(546)	(576)	(462)	(160)
Adjusted interest and debt expense, after taxes⁷	1,989)	2,053)	2,165)	1,740)	603)
Net income (loss) attributable to noncontrolling interest	(20)	(118)	(88)	(68)	(41)
Net operating profit after taxes (NOPAT)	(77)	(2,910)	(2,649)	(8,306)	(1,241)

Based on: 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), 10-K (reporting date: 2019-12-31).

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 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,814 × 3.21% = 58

⁶ 2023 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= 2,517 × 21.00% = 529

⁷ Addition of after taxes interest expense to net loss attributable to Boeing Shareholders.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Boeing Co. NOPAT decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Boeing Co., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense (benefit)	237)	31)	(743)	(2,535)	(1,623)
Less: Deferred income tax expense (benefit)	30)	(11)	(843)	1,264)	(1,323)
Add: Tax savings from interest and debt expense	529)	546)	576)	462)	160)
Cash operating taxes	736)	588)	676)	(3,337)	(140)

Based on: 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), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Boeing Co. cash operating taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Boeing Co., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Short-term debt and current portion of long-term debt	5,204)	5,190)	1,296)	1,693)	7,340)
Long-term debt, excluding current portion	47,103)	51,811)	56,806)	61,890)	19,962)
Operating lease liability¹	1,814)	1,581)	1,539)	1,352)	1,230)
Total reported debt & leases	54,121)	58,582)	59,641)	64,935)	28,532)
Shareholders’ deficit	(17,233)	(15,883)	(14,999)	(18,316)	(8,617)
Net deferred tax (assets) liabilities²	170)	167)	141)	924)	(270)
Valuation allowance³	89)	116)	390)	444)	73)
Product warranties⁴	2,448)	2,275)	1,900)	1,527)	1,267)
Equity equivalents⁵	2,707)	2,558)	2,431)	2,895)	1,070)
Accumulated other comprehensive (income) loss, net of tax⁶	10,305)	9,550)	11,659)	17,133)	16,153)
Noncontrolling interests	5)	35)	153)	241)	317)
Adjusted shareholders’ deficit	(4,216)	(3,740)	(756)	1,953)	8,923)
Construction in progress⁷	(1,679)	(1,368)	(1,235)	(1,340)	(1,306)
Investments, excluding Equity method investments⁸	(3,343)	(2,641)	(8,237)	(17,918)	(606)
Invested capital	44,883)	50,833)	49,413)	47,630)	35,543)

Based on: 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), 10-K (reporting date: 2019-12-31).

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.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Boeing Co. invested capital increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Boeing Co., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	128,763)	128,763)	÷	181,869)	=	0.71	0.71	×	18.50%	=	13.10%
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					14.17%

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 »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	126,330)	126,330)	÷	180,973)	=	0.70	0.70	×	18.50%	=	12.92%
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					14.02%

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 »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	116,740)	116,740)	÷	184,183)	=	0.63	0.63	×	18.50%	=	11.73%
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					13.05%

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 »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	114,174)	114,174)	÷	188,086)	=	0.61	0.61	×	18.50%	=	11.23%
Debt, including finance lease obligations and commercial paper³	72,560)	72,560)	÷	188,086)	=	0.39	0.39	×	4.21% × (1 – 21.00%)	=	1.28%
Operating lease liability⁴	1,352)	1,352)	÷	188,086)	=	0.01	0.01	×	3.43% × (1 – 21.00%)	=	0.02%
Total:	188,086)					1.00					12.53%

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 »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	179,234)	179,234)	÷	209,921)	=	0.85	0.85	×	18.50%	=	15.80%
Debt, including finance lease obligations and commercial paper³	29,457)	29,457)	÷	209,921)	=	0.14	0.14	×	4.64% × (1 – 21.00%)	=	0.51%
Operating lease liability⁴	1,230)	1,230)	÷	209,921)	=	0.01	0.01	×	3.35% × (1 – 21.00%)	=	0.02%
Total:	209,921)					1.00					16.33%

Based on: 10-K (reporting date: 2019-12-31).

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 »

Boeing Co., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(6,436)	(10,035)	(9,098)	(14,276)	(7,045)
Invested capital²	44,883)	50,833)	49,413)	47,630)	35,543)
Performance Ratio
Economic spread ratio³	-14.34%	-19.74%	-18.41%	-29.97%	-19.82%
Benchmarks
Economic Spread Ratio, Competitors⁴
Caterpillar Inc.	4.72%	1.07%	1.01%	-5.12%	1.20%
Cummins Inc.	-7.04%	-1.28%	2.65%	-0.67%	4.71%
Eaton Corp. plc	-2.46%	-4.56%	-4.34%	-6.45%	-3.77%
General Electric Co.	7.42%	-8.80%	-13.79%	-3.94%	-6.49%
Honeywell International Inc.	0.14%	-0.81%	0.24%	-1.19%	3.08%
Lockheed Martin Corp.	17.24%	13.23%	14.22%	17.53%	18.14%
RTX Corp.	-3.32%	-3.19%	-2.72%	-8.24%	0.25%

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -6,436 ÷ 44,883 = -14.34%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Boeing Co. economic spread ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Boeing Co., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(6,436)	(10,035)	(9,098)	(14,276)	(7,045)
Revenues	77,794)	66,608)	62,286)	58,158)	76,559)
Performance Ratio
Economic profit margin²	-8.27%	-15.07%	-14.61%	-24.55%	-9.20%
Benchmarks
Economic Profit Margin, Competitors³
Caterpillar Inc.	4.24%	1.04%	1.16%	-7.11%	1.30%
Cummins Inc.	-4.25%	-1.03%	1.92%	-0.59%	3.02%
Eaton Corp. plc	-3.33%	-6.76%	-6.52%	-9.90%	-5.20%
General Electric Co.	5.77%	-7.98%	-13.92%	-6.29%	-9.65%
Honeywell International Inc.	0.18%	-1.06%	0.34%	-1.77%	3.58%
Lockheed Martin Corp.	7.00%	5.33%	6.07%	7.52%	7.79%
RTX Corp.	-5.40%	-5.40%	-4.85%	-16.84%	0.34%

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenues
= 100 × -6,436 ÷ 77,794 = -8.27%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Boeing Co. economic profit margin deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Boeing Co. (NYSE:BA)

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