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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Boeing Co. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Price to Earnings (P/E) since 2005
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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
= – × =
The analysis of the financial data reveals a challenging performance landscape marked by persistent negative returns and substantial economic losses over the observed periods.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT demonstrates a consistently negative trend, indicating operational losses throughout all reported years. The figure improved significantly from a loss of 8,306 million US dollars in 2020 to a much smaller loss of 77 million in 2023, suggesting a period of operational recovery or cost management. However, this positive trend reversed dramatically in 2024, with losses surging to 10,234 million US dollars, exceeding the initial 2020 loss level.
- Cost of Capital
- The cost of capital shows a gradual increase from 13.66% in 2020 to a peak of 15.48% in 2023, followed by a slight decrease to 15.34% in 2024. This upward trend implies rising risks or changes in capital structure costs, heightening the firm’s required returns over the period.
- Invested Capital
- Invested capital marginally increased from 47,630 million US dollars in 2020 to a peak of 50,833 million in 2022, then declined to 44,883 million in 2023 before rebounding to 50,250 million in 2024. This fluctuation suggests variable investment levels or asset base changes, with a notable drawdown in 2023 followed by reinvestment or asset growth in 2024.
- Economic Profit
- Economic profit remains negative for all periods, indicating value destruction relative to the cost of capital. The losses eased from 14,813 million US dollars in 2020 to 7,026 million in 2023, reflecting some improvement in economic returns. Nevertheless, 2024 saw a marked deterioration to 17,943 million US dollars in losses, surpassing the earlier deficits and underscoring significant challenges in generating returns above capital costs.
Overall, the financial trends reveal significant operational and capital efficiency difficulties. The temporary improvements observed up to 2023 were reversed sharply in 2024, with both operational profitability and economic value undermined. The rising cost of capital further exerts pressure on performance metrics, intensifying the negative economic profit environment. These dynamics point to a need for strategic reassessment to address the escalating losses and capital cost pressures observed in the latest period.
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.
- 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 -$10,234 million, indicating a substantial decline in operating profitability after taxes.
Cash Operating Taxes
Boeing Co., cash operating taxes calculation
US$ 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 indicators over the five-year period reveals significant fluctuations and an overall negative performance trend.
- Economic Profit
- The economic profit remained consistently negative throughout the period, indicating that the company did not generate returns above its cost of capital during these years. Although there was some improvement in 2021 and 2023 compared to 2020 and 2022, the value worsened considerably in 2024, reaching its lowest point at -17,943 million US dollars. This suggests increasing challenges in creating economic value in the most recent year.
- Invested Capital
- Invested capital generally increased over the period, starting at 47,630 million US dollars in 2020 and rising to 50,250 million US dollars in 2024, despite a decline in 2023. This upward trend implies continuing investment in assets or resources, although the drop in 2023 suggests some divestment or asset reduction during that year.
- Economic Spread Ratio
- This ratio, reflecting the spread between returns and cost of capital, was negative throughout all years, which corroborates the sustained negative economic profits. Although the ratio improved slightly in the years 2021 and 2023 compared to 2020 and 2022, it sharply deteriorated in 2024 to -35.71%, the worst level in the observed period. This indicates that returns fell even further below the cost of capital in the latest year, pointing to decreased efficiency in capital utilization.
Overall, the data indicates persistent difficulties in achieving economic profitability despite an increase in invested capital. The worsening economic spread ratio and economic profit in the most recent year highlight growing inefficiencies or increased costs relative to returns. This trend suggests the need for strategic reassessment to improve value generation 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.
The financial data reveals several notable trends over the five-year period analyzed. Revenues displayed a generally positive trajectory from 2020 through 2023, increasing from approximately 58.2 billion US dollars to nearly 77.8 billion US dollars. However, in the final year, revenues decreased to approximately 66.5 billion US dollars, indicating a notable decline after a period of growth.
Economic profit, expressed in millions of US dollars, remained negative throughout the entire period, reflecting consistent economic losses. Although there was some improvement in economic profit from 2020 to 2023, with losses decreasing from about -14.8 billion to approximately -7.0 billion, the figure worsened significantly in 2024, dropping to nearly -17.9 billion. This reversal suggests a deterioration in the company's ability to generate returns above its cost of capital in the most recent year.
The economic profit margin, which expresses economic profit as a percentage of revenues, mirrors the trends seen in absolute economic profit. It improved steadily from a negative margin of around -25.5% in 2020 to about -9.0% by 2023. This indicates a reduction in economic losses relative to sales during that time. Nonetheless, the margin then sharply declined to nearly -27.0% in 2024, the lowest point in the observed timeframe, pointing to a significant drop in economic profitability relative to revenues.
- Revenues
- Increased steadily over four years, followed by a sharp decline in the final year.
- Economic Profit
- Consistently negative but showed improvement until 2023, then worsened markedly in 2024.
- Economic Profit Margin
- Improved from 2020 to 2023, indicating reduced relative losses, before experiencing a significant downturn in 2024.
Overall, while the company demonstrated revenue growth and improving economic profitability for the majority of the period, the sharp reversals in 2024 raise concerns about recent operational or market challenges adversely impacting economic returns and overall financial health.