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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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 reveal a substantial negative performance throughout the periods observed. Starting at -8,306 million USD in 2020, it shows an improving trend by rising to -2,649 million USD in 2021. However, it slightly deteriorates again in 2022 to -2,910 million USD and reaches near breakeven in 2023 with a value of -77 million USD. A significant decline occurs in 2024, with NOPAT plunging to -10,234 million USD, marking the worst performance in the observed timeline.
- Cost of capital
- The cost of capital exhibits a gradual increase from 13.48% in 2020 to a peak of 15.27% in 2023, before slightly decreasing to 15.14% in 2024. This upward trend indicates an increasing capital expense over the years, progressively raising the benchmark that operating profits must exceed to create value.
- Invested capital
- The invested capital shows a general upward trajectory from 47,630 million USD in 2020 to 50,250 million USD in 2024, albeit with a dip in 2023 to 44,883 million USD. The initial increase through 2022 suggests ongoing capital allocation or asset accumulation before a notable reduction in 2023, which then rebounds in 2024.
- Economic profit
- The economic profit remains negative in all periods, indicating that the company has consistently failed to generate returns above its cost of capital. While economic profit improves from -14,727 million USD in 2020 to -6,931 million USD in 2023, this improvement reverses sharply in 2024 to -17,840 million USD. The pattern mirrors the NOPAT trend and highlights difficulties in value creation, especially 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.
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
- The economic profit demonstrates significant fluctuations across the periods. In 2020, it was strongly negative at -14,727 million USD, improving by 4,141 million USD to -9,586 million USD in 2021. However, it deteriorated in 2022 to -10,588 million USD, followed by a notable improvement in 2023 to -6,931 million USD. The latest figure in 2024 shows a sharp decline to -17,840 million USD, representing the most substantial economic loss within the examined timeframe.
- Invested Capital
- Invested capital exhibits a generally increasing trend with some variability. Initially, it rose moderately from 47,630 million USD in 2020 to 49,413 million USD in 2021, and continued increasing to 50,833 million USD in 2022. There was a decline in 2023 to 44,883 million USD, amounting to the lowest capital investment in the five-year span. The capital investment rebounded again in 2024, reaching 50,250 million USD, close to the earlier peak levels.
- Economic Spread Ratio
- The economic spread ratio is consistently negative, indicating that the returns on invested capital fall short of cost. The ratio starts at -30.92% in 2020, lessening its negative impact to -19.4% in 2021, but worsens again to -20.83% in 2022. A further improvement is noticed in 2023, with the ratio rising to -15.44%. Nevertheless, the ratio plummets sharply in 2024 to -35.5%, the lowest point over the period and signaling a substantial decline in 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 fluctuating economic profit figures over the analyzed periods. Economic profit, expressed in millions of US dollars, initially improved from a substantial negative value of -14,727 in 2020 to -9,586 in 2021, indicating a reduction in losses. However, the metric deteriorated again in 2022, reaching -10,588, followed by an improvement in 2023 with a decrease in losses to -6,931. Despite these improvements, the economic profit sharply declined in 2024, plunging to -17,840, the lowest point in the time series.
Revenues exhibit a generally positive trend over the years. Starting at 58,158 million US dollars in 2020, revenues steadily increased through 2021 and 2022, reaching a peak of 77,794 million in 2023. Nevertheless, the revenue figure dropped in 2024 to 66,517 million, showing a notable decrease from the previous year's peak.
The economic profit margin percentage follows a similar pattern to economic profit. Beginning at -25.32% in 2020, the margin improved to -15.39% in 2021 and slightly worsened to -15.9% in 2022. The margin then improved considerably in 2023 to -8.91%, indicating better profitability efficiency relative to revenues. In 2024, the margin deteriorated drastically to -26.82%, reflecting a significant reverse in financial performance relative to revenue generation.
- Summary of Trends:
- Economic profit and its margin show improvement from 2020 through 2023, suggesting enhanced operational efficiency or cost management. However, both metrics deteriorate sharply in 2024.
- Revenues grow consistently through 2023 but decline notably in 2024, indicating potential external challenges or market conditions affecting sales or contract executions.
- The divergence between revenue growth and economic profit in certain periods points to rising costs or other factors detracting from profitability despite increasing revenue until 2023.