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
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Return on Assets (ROA) 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
= – × =
The financial data reveals several notable trends and insights over the five-year period.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT figures exhibit a consistently negative performance throughout the periods, indicating that operating profits after tax have not been positive at any point. The magnitude of loss decreased significantly from 2020 to 2023, reaching its lowest negative value in 2023 at -77 million USD. However, in 2024, the losses sharply increased again, reaching the largest negative value of -10,234 million USD, indicating a significant deterioration in operating profitability.
- Cost of Capital
- The cost of capital has increased steadily from 13.77% in 2020 to a peak of 15.61% in 2023, slightly decreasing to 15.47% in 2024. This rising trend in the cost of capital suggests increasing financing costs or higher perceived risks associated with the company's capital, negatively impacting its overall valuation.
- Invested Capital
- Invested capital experienced a gradual increase from 47,630 million USD in 2020 to 50,833 million USD in 2022, followed by a decline to 44,883 million USD in 2023. It then rose again to 50,250 million USD in 2024. These fluctuations indicate changes in the company's asset base or capital expenditure cycles, with a temporary reduction in investment in 2023 before rebounding in the following year.
- Economic Profit
- The economic profit remains negative across all years, reflecting persistent value destruction relative to the company's cost of capital. Although the losses narrowed from -14,866 million USD in 2020 to -7,084 million USD in 2023, there was a significant worsening in 2024, with economic profit declining sharply to -18,006 million USD. This shift corresponds with the severe drop in NOPAT and illustrates the company’s struggle to generate returns above its capital costs during this period.
Overall, the data reflects ongoing operational and financial challenges, marked by negative profitability and value destruction, coupled with rising capital costs. The temporary improvement seen up to 2023 was negated by a considerable decline in 2024, signaling potential issues that may require strategic reassessment or operational restructuring to restore financial health.
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.
- Economic Profit
- The economic profit demonstrated significant fluctuations over the five-year period. It initially recorded a substantial loss of approximately $14.87 billion in 2020, which improved to a lower loss of around $9.74 billion in 2021. However, this trend reversed slightly in 2022 with a moderate increase in losses to about $10.76 billion. Following this, the economic profit improved noticeably in 2023 to a loss of about $7.08 billion. Nevertheless, in 2024, economic profit sharply deteriorated again, reaching the highest loss in the period at approximately $18.01 billion.
- Invested Capital
- Invested capital showed a generally stable to increasing pattern, with some variability. Starting at around $47.63 billion in 2020, it gradually increased to $49.41 billion in 2021 and further to $50.83 billion in 2022. A decline was observed in 2023, reducing invested capital to about $44.88 billion. However, this decline was temporary as the invested capital rebounded in 2024 to approximately $50.25 billion, nearing the earlier peak levels.
- Economic Spread Ratio
- The economic spread ratio was negative throughout the entire period, indicating that the returns did not exceed the cost of capital. It initially stood at -31.21% in 2020 and showed improvement in 2021 to -19.7%. This improvement was short-lived, as the ratio decreased slightly to -21.16% in 2022. By 2023, the ratio improved again to its best point of the period at -15.78%, but then deteriorated sharply in 2024 to -35.83%, the worst performance within the reported years.
- Overall Trends and Insights
- The data reveals a volatile economic profit trajectory showing some recovery phases interrupted by significant setbacks. Invested capital remained relatively stable with a brief decline followed by recovery, suggesting cautious capital deployment or adjustments in asset base. The persistent negative economic spread ratio, with a notable deepening in the final year, suggests ongoing challenges in generating returns above capital costs. The pronounced deterioration in economic profit and spread ratio in 2024 warrants close attention as it may imply increased operational or market difficulties impacting profitability and efficiency.
Economic Profit Margin
Boeing Co., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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 annual financial data reveals several key trends over the observed periods.
- Economic Profit
- The economic profit has consistently remained negative across all periods, indicating that the company has been experiencing economic losses rather than gains. Although there was an improvement moving from -14,866 million US$ in 2020 to -7,084 million US$ in 2023, the economic profit sharply deteriorated again in 2024, dropping to -18,006 million US$, the lowest point within the data series.
- Revenues
- Revenues demonstrated a generally positive trend from 2020 through 2023, increasing from 58,158 million US$ to 77,794 million US$. This upward trajectory reflects growth in the company’s top-line performance during these years. However, the revenue figure decreased significantly in 2024 to 66,517 million US$, reversing the earlier growth trend and suggesting challenges impacting sales or contract fulfillment in the most recent period.
- Economic Profit Margin
- The economic profit margin, consistently negative throughout, aligns with the negative economic profit values. It improved progressively from -25.56% in 2020 to -9.11% in 2023, indicating a narrowing of losses relative to revenues. Yet, a steep decline ensued in 2024, where the margin dropped sharply to -27.07%, signaling a marked decrease in profitability efficiency and highlighting substantial economic loss relative to revenue during that year.
Overall, the data suggests that while revenue growth was relatively strong up until 2023, profitability metrics such as economic profit and economic profit margin reveal fundamental challenges in converting revenues into positive economic returns. The deterioration of both economic profit and margin in 2024 despite a relatively high revenue level warrants further investigation into cost management, operational efficiency, and market conditions affecting the company.