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 – 15.55% × 53,662 = -3,099
The financial trajectory from 2021 to 2025 is characterized by persistent economic value destruction, as indicated by negative economic profit throughout the entire five-year period. While operational improvements are evident in the final year, the returns generated remained insufficient to cover the cost of invested capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrated significant volatility over the analyzed period. After reporting losses in 2021 and 2022, the figure improved substantially to a near-breakeven position of -77 million US$ in 2023. This progress was reversed in 2024, with a sharp decline to -10,234 million US$. However, a strong recovery is observed in 2025, as NOPAT shifted to a positive value of 5,245 million US$.
- Cost of Capital and Invested Capital
- The cost of capital exhibited a general upward trend, increasing from 13.66% in 2021 to a peak of 15.55% in 2025. This rising trend increased the financial hurdle required to achieve a positive economic profit. Concurrently, invested capital fluctuated, dipping to 44,905 million US$ in 2023 before increasing steadily to reach 53,662 million US$ by 2025.
- Economic Profit and Value Creation
- Economic profit remained consistently negative, confirming that the entity failed to create economic value during this timeframe. The most significant value erosion occurred in 2024, with economic profit dropping to -17,635 million US$. Although the positive shift in NOPAT in 2025 led to a reduction in economic losses to -3,099 million US$, the combination of a higher cost of capital and increased invested capital prevented the achievement of a positive economic value added (EVA).
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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$53,662 million in 2025, driven by the improvement in shareholders’ equity and the stabilization of debt levels. The overall trend suggests a period of capital contraction followed by a recovery and expansion.
The substantial shift in shareholders’ equity is a key driver of the changes observed in invested capital. The company’s ability to move from a significant deficit to a positive equity position represents a notable financial achievement and supports the increase in invested capital observed in the later years of the period.
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Cost of Capital
Boeing Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 183,551) | 183,551) | ÷ | 247,779) | = | 0.74 | 0.74 | × | 19.46% | = | 14.41% | ||
| 6.00% Series A Mandatory Convertible Preferred Stock | 7,942) | 7,942) | ÷ | 247,779) | = | 0.03 | 0.03 | × | 6.00% | = | 0.19% | ||
| Debt, including finance lease obligations and commercial paper3 | 54,019) | 54,019) | ÷ | 247,779) | = | 0.22 | 0.22 | × | 5.31% × (1 – 21.00%) | = | 0.91% | ||
| Operating lease liability4 | 2,267) | 2,267) | ÷ | 247,779) | = | 0.01 | 0.01 | × | 3.97% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 247,779) | 1.00 | 15.55% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | × | 19.46% | = | 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 | 14.72% | ||||||||||
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 | × | 19.46% | = | 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 | 14.84% | ||||||||||
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 | × | 19.46% | = | 13.58% | ||
| 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 | 14.68% | ||||||||||
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 | × | 19.46% | = | 12.33% | ||
| 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 | (3,099) | (17,635) | (6,742) | (10,379) | (9,404) | |
| Invested capital2 | 53,662) | 50,271) | 44,905) | 50,866) | 49,465) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -5.78% | -35.08% | -15.01% | -20.40% | -19.01% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Caterpillar Inc. | -6.76% | -2.20% | -2.26% | -6.19% | -5.60% | |
| Eaton Corp. plc | -5.03% | -6.21% | -7.78% | -9.69% | -9.30% | |
| GE Aerospace | 3.37% | -0.52% | 1.30% | -13.67% | -18.58% | |
| Honeywell International Inc. | -4.97% | -4.00% | -2.14% | -3.12% | -2.03% | |
| Lockheed Martin Corp. | 12.56% | 11.55% | 17.99% | 14.01% | 14.99% | |
| RTX Corp. | -1.00% | -3.11% | -4.84% | -4.90% | -4.36% | |
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 × -3,099 ÷ 53,662 = -5.78%
4 Click competitor name to see calculations.
The financial performance over the five-year period is characterized by a persistent inability to generate positive economic profit, indicating that the cost of capital consistently exceeded the returns generated from invested capital. While the trend exhibits significant volatility, there is a notable recovery toward the end of the period.
- Economic Profit Trends
- Economic profit remained negative throughout the analyzed timeframe. After a slight decline from 2021 to 2022, a moderate recovery occurred in 2023. This was followed by a sharp deterioration in 2024, where losses peaked at -17,635 million US$. However, 2025 marks a substantial improvement, with economic profit narrowing to -3,099 million US$, the highest value recorded in the sequence.
- Invested Capital Dynamics
- Invested capital demonstrated a fluctuating but generally upward trend, moving from 49,465 million US$ in 2021 to 53,662 million US$ by 2025. A temporary contraction was observed in 2023, with capital decreasing to 44,905 million US$, before returning to a growth trajectory in the final two years.
- Economic Spread Ratio Analysis
- The economic spread ratio reflected the high volatility of the company's value creation efficiency. The ratio moved from -19.01% in 2021 to -20.40% in 2022, before improving to -15.01% in 2023. A severe decline to -35.08% occurred in 2024, representing the period of maximum value destruction. By 2025, the ratio improved significantly to -5.78%, indicating a narrowing gap between the return on invested capital and the cost of capital, although the result remains negative.
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Economic Profit Margin
Boeing Co., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | (3,099) | (17,635) | (6,742) | (10,379) | (9,404) | |
| Revenues | 89,463) | 66,517) | 77,794) | 66,608) | 62,286) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -3.46% | -26.51% | -8.67% | -15.58% | -15.10% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Caterpillar Inc. | -6.83% | -2.06% | -1.97% | -5.99% | -6.46% | |
| Eaton Corp. plc | -6.33% | -7.97% | -10.54% | -14.37% | -13.96% | |
| GE Aerospace | 3.07% | -0.56% | 1.01% | -12.40% | -18.76% | |
| Honeywell International Inc. | -8.06% | -6.26% | -2.83% | -4.12% | -2.84% | |
| Lockheed Martin Corp. | 5.08% | 4.68% | 7.30% | 5.65% | 6.40% | |
| RTX Corp. | -1.23% | -4.14% | -7.61% | -8.04% | -7.58% | |
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 × -3,099 ÷ 89,463 = -3.46%
3 Click competitor name to see calculations.
The analyzed period is characterized by consistent negative economic profit, indicating that the company failed to generate returns in excess of its cost of capital from 2021 through 2025. While revenue figures showed overall growth, the economic profit margin remained negative throughout the timeframe, reflecting persistent challenges in value creation.
- Revenue Performance
- Revenues exhibited a non-linear growth trajectory, rising from US$ 62,286 million in 2021 to a period high of US$ 89,463 million in 2025. A significant contraction is observed in 2024, where revenues fell to US$ 66,517 million, representing a decline from the previous year's US$ 77,794 million before rebounding sharply in the final year.
- Economic Profit Trajectory
- Economic profit remained negative throughout the five-year sequence. After relatively stable losses in 2021 and 2022, a temporary improvement occurred in 2023 with a loss of US$ 6,742 million. This was followed by a severe deterioration in 2024, where economic profit dropped to its lowest point of -US$ 17,635 million. A substantial recovery is evident in 2025, as losses narrowed to -US$ 3,099 million.
- Economic Profit Margin Analysis
- The economic profit margin mirrored the volatility of the absolute economic profit. The margin fluctuated from -15.10% in 2021 to a peak deficit of -26.51% in 2024. This 2024 trough represents the period of lowest capital efficiency. By 2025, the margin improved significantly to -3.46%, marking the most favorable position within the analyzed period, although it remained below the threshold for positive economic value added.
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