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: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) 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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT values show a consistently negative trend across the reported periods, indicating persistent operating losses. The loss was highest at -8,306 million USD in 2020, improved somewhat in 2021 to -2,649 million USD, but then worsened slightly again in 2022 to -2,910 million USD. The figure notably approached breakeven in 2023 with a minimal loss of -77 million USD, before deteriorating significantly to -10,234 million USD in 2024.
- Cost of Capital
- The cost of capital exhibits a gradual increase over the five years, starting at 13.39% in 2020 and rising to 15.03% in 2024. This upward trajectory suggests rising financing or equity costs, which could increase the hurdle rate for investment returns.
- Invested Capital
- Invested capital steadily increased from 47,630 million USD in 2020 to 50,833 million USD in 2022, illustrating a period of growth in capital deployment. However, in 2023, there is a noticeable dip to 44,883 million USD, followed by a recovery in 2024 to 50,250 million USD, signaling potential capital restructuring or asset divestitures before expanding again.
- Economic Profit
- Economic profit remained negative throughout the timeframe, reflecting returns below the cost of capital. The loss decreased from -14,683 million USD in 2020 to -6,883 million USD in 2023, showing some improvement in economic value creation. Nonetheless, in 2024, economic profit significantly worsened to -17,788 million USD, indicating a considerable decline in value generation relative to invested capital and cost of capital.
- Overall Insights
- The financial data indicates sustained challenges in achieving profitable operations with negative NOPAT and economic profit in all periods. Despite some improvement phases, especially in 2023, the overall trend culminates in substantial operating and economic losses by 2024. The rising cost of capital adds pressure on profitability, while fluctuations in invested capital suggest strategic shifts in asset investment. The inability to generate positive economic profit signals ongoing issues in creating shareholder value relative to invested resources and capital costs.
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.
- Economic Profit Trends
- The economic profit remained negative throughout the period analyzed, indicating consistent economic losses. Initially, the loss was significant at -14,683 million US dollars in 2020, improving somewhat in 2021 to -9,538 million US dollars. However, the figure worsened in 2022 to -10,534 million US dollars, then improved markedly in 2023 to -6,883 million US dollars. The trend reversed sharply in 2024, with economic profit deteriorating to its lowest point of -17,788 million US dollars.
- Invested Capital Trends
- Invested capital showed a general increasing trend over the period, starting at 47,630 million US dollars in 2020 and rising to 50,250 million US dollars by 2024. There was a slight peak in 2022 at 50,833 million US dollars, followed by a decrease to 44,883 million US dollars in 2023, and then a rebound in 2024. This indicates some fluctuations but an overall increase in capital investment over time.
- Economic Spread Ratio Trends
- The economic spread ratio was negative in all periods, reflecting ongoing inefficiency in generating returns above the cost of capital. It improved modestly from -30.83% in 2020 to -15.34% by 2023, showing some progress in economic return efficiency. Nevertheless, this ratio sharply declined to -35.4% in 2024, indicating a significant deterioration in economic spread and a worsening gap between returns and capital costs.
- Overall Insights
- Across the examined years, the financial data reveal persistent economic challenges characterized by negative economic profits and economic spread ratios. Despite an overall increase in invested capital, the company struggled to generate sufficient returns to cover the cost of capital, with particularly poor performance in 2024. While some improvements were noted in intervening years, the sharp decline in 2024 suggests either operational setbacks or unfavorable market conditions adversely impacting economic value generation.
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.
- Revenues
- The revenue shows an overall increasing trend from 2020 to 2023, rising from 58,158 million USD in 2020 to 77,794 million USD in 2023. However, in 2024, revenue declines to 66,517 million USD, which is lower than the previous year but still above the 2020 level. This indicates strong growth over the initial years, followed by a notable decrease in the most recent period.
- Economic Profit
- The economic profit remains negative throughout the entire period, indicating that the company did not generate value above its cost of capital during these years. The loss narrowed from -14,683 million USD in 2020 to a lower loss of -6,883 million USD in 2023, showing some improvement. However, this is reversed sharply in 2024, with economic profit dropping to -17,788 million USD, a significant decline compared to previous years.
- Economic Profit Margin
- The economic profit margin follows a pattern similar to economic profit. It improved from -25.25% in 2020 to -8.85% in 2023, indicating enhanced profitability relative to revenues. Nonetheless, the margin worsens considerably in 2024 to -26.74%, signaling a substantial decrease in profitability efficiency relative to revenue for that year.
- Insights
- Over the multi-year period, the company experienced growth in revenues, accompanied by an improvement in economic profits and margins, especially from 2020 to 2023. This suggests some recovery or operational improvements during these years. However, 2024 marks a reversal of positive trends with a decline in revenues coupled with a significant deterioration in economic profit and margin, indicating challenges that severely impacted financial performance.