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
Bristol-Myers Squibb 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
= 7,695 – 7.12% × 59,271 = 3,477
The financial performance between 2021 and 2025 is characterized by significant volatility in operational profitability and a consistent reduction in the capital base. While the cost of capital remained relatively stable throughout the period, economic profit experienced extreme fluctuations, culminating in a severe contraction in 2024 followed by a robust recovery in 2025.
- Net Operating Profit After Taxes (NOPAT)
- Operational profitability exhibited high instability. After a decline in 2022 and a partial recovery in 2023, a substantial deficit was recorded in 2024, with NOPAT falling to negative 9,292 million US dollars. However, 2025 saw a sharp reversal, with profitability reaching its highest point in the analyzed period at 7,695 million US dollars.
- Invested Capital and Cost of Capital
- A consistent downward trend is observed in invested capital, which decreased from 80,284 million US dollars in 2021 to 59,271 million US dollars by 2025. This represents a steady contraction of the asset base used to generate returns. Concurrently, the cost of capital remained narrow in its range, fluctuating minimally between 6.94% and 7.36%.
- Economic Profit Trends
- Economic profit mirrored the volatility of NOPAT, reflecting the company's ability to generate returns above its cost of capital. Value creation was positive in 2021 and 2023, but value destruction occurred in 2022 and peaked in 2024 with a loss of 13,667 million US dollars. The transition to an economic profit of 3,477 million US dollars in 2025 indicates a successful restoration of value creation, aided by both the recovery in NOPAT and the reduced threshold of the capital charge due to the lower invested capital base.
AI Ask an analyst for more
Net Operating Profit after Taxes (NOPAT)
Bristol-Myers Squibb 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 allowance for expected credit loss.
3 Addition of increase (decrease) in restructuring liability.
4 Addition of increase (decrease) in equity equivalents to net earnings (loss) attributable to BMS.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 2,028 × 5.00% = 101
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,992 × 21.00% = 418
7 Addition of after taxes interest expense to net earnings (loss) attributable to BMS.
The financial performance, as indicated by net earnings and net operating profit after taxes, exhibits considerable fluctuation over the five-year period. A notable divergence between these figures is observed in 2024, warranting further investigation.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrates a significant decline from 2021 to 2022, decreasing from US$6,656 million to US$4,571 million. A partial recovery is then seen in 2023, with NOPAT reaching US$5,869 million. However, 2024 presents a substantial negative value of US$9,292 million, representing a considerable downturn. The final year, 2025, shows a return to positive figures, with NOPAT at US$7,695 million, exceeding the 2021 level.
- Net Earnings Attributable to BMS
- Net earnings follow a similar pattern of fluctuation, though less extreme than NOPAT. A decrease is observed from US$6,994 million in 2021 to US$6,327 million in 2022. Earnings increase to US$8,025 million in 2023 before experiencing a substantial loss of US$8,948 million in 2024. Net earnings recover in 2025, reaching US$7,054 million.
The correlation between NOPAT and net earnings is strong, suggesting that changes in operating profitability directly impact the bottom line. The pronounced negative results in 2024 for both metrics indicate a period of significant operational or financial challenges. The subsequent recovery in 2025 suggests corrective actions or favorable market conditions may have taken effect. The difference between NOPAT and net earnings should be investigated to understand non-operating factors impacting overall profitability.
- Comparative Trend
- While both NOPAT and net earnings move in the same direction, the magnitude of change in NOPAT is consistently greater. This suggests that operating performance is a primary driver of overall profitability, and fluctuations in operating results have a magnified effect on the company’s financial outcome.
AI Ask an analyst for more
Cash Operating Taxes
Bristol-Myers Squibb Co., cash operating taxes calculation
US$ 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 income tax provision and cash operating taxes exhibited distinct trends between 2021 and 2025. A significant fluctuation in income tax provision is observed, while cash operating taxes demonstrate a more moderate pattern of change.
- Income Tax Provision
- The income tax provision increased from US$1,084 million in 2021 to US$1,368 million in 2022, representing a 26.2% increase. A substantial decrease followed in 2023, with the provision falling to US$400 million. This trend reversed in 2024, with a rise to US$554 million, before reaching US$2,272 million in 2025 – the highest value observed during the analyzed period. This indicates considerable volatility in reported income tax expense.
- Cash Operating Taxes
- Cash operating taxes increased from US$2,764 million in 2021 to US$4,376 million in 2022, a 58.3% increase. The value then decreased to US$3,947 million in 2023, followed by a further decrease to US$3,068 million in 2024. In 2025, cash operating taxes rose to US$3,655 million. While fluctuating, the changes in cash operating taxes were less dramatic than those observed in the income tax provision.
The divergence between the income tax provision and cash operating taxes suggests potential differences between book and tax accounting methods. The substantial increase in income tax provision in 2025, coupled with a moderate increase in cash operating taxes, warrants further investigation into the underlying drivers of these changes, such as deferred tax adjustments or changes in tax legislation. The higher cash taxes paid relative to the income tax provision in 2021 and 2022 could be due to prior year tax liabilities being settled.
AI Ask an analyst for more
Invested Capital
Bristol-Myers Squibb Co., invested capital calculation (financing approach)
US$ 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 restructuring liability.
5 Addition of equity equivalents to total BMS shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable debt securities and equity investments.
The invested capital of the company decreased over the five-year period from 2021 to 2025. Simultaneously, both total reported debt & leases and total shareholders’ equity exhibited fluctuations, contributing to the overall trend in invested capital.
- Invested Capital Trend
- Invested capital began at US$80,284 million in 2021 and experienced a consistent decline, reaching US$59,271 million by 2025. The largest single-year decrease occurred between 2022 and 2023, with a reduction of US$4,158 million. The rate of decline slowed between 2024 and 2025.
- Debt & Leases
- Total reported debt & leases decreased from US$45,596 million in 2021 to US$40,717 million in 2022, representing a notable reduction. It then increased to US$41,464 million in 2023 before rising significantly to US$51,200 million in 2024. A subsequent decrease to US$47,139 million was observed in 2025. This fluctuating debt level likely influenced the overall invested capital.
- Shareholders’ Equity
- Total shareholders’ equity demonstrated a consistent downward trend from 2021 to 2024. Beginning at US$35,946 million in 2021, it decreased to US$16,335 million in 2024. A modest increase to US$18,473 million occurred in 2025, but equity remained substantially lower than its initial value. This decline in equity contributed significantly to the reduction in invested capital.
The combined effect of decreasing shareholders’ equity and fluctuating debt levels resulted in the observed decline in invested capital. The increase in debt in 2024 partially offset the continued decrease in equity, but the overall trend remained negative. The slight recovery in shareholders’ equity in 2025 did not fully reverse the prior declines.
AI Ask an analyst for more
Cost of Capital
Bristol-Myers Squibb Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 122,046) | 122,046) | ÷ | 165,858) | = | 0.74 | 0.74 | × | 8.50% | = | 6.25% | ||
| Debt3 | 41,784) | 41,784) | ÷ | 165,858) | = | 0.25 | 0.25 | × | 4.09% × (1 – 21.00%) | = | 0.81% | ||
| Operating lease liability4 | 2,028) | 2,028) | ÷ | 165,858) | = | 0.01 | 0.01 | × | 5.00% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 165,858) | 1.00 | 7.12% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 113,946) | 113,946) | ÷ | 161,015) | = | 0.71 | 0.71 | × | 8.50% | = | 6.01% | ||
| Debt3 | 45,518) | 45,518) | ÷ | 161,015) | = | 0.28 | 0.28 | × | 4.17% × (1 – 21.00%) | = | 0.93% | ||
| Operating lease liability4 | 1,551) | 1,551) | ÷ | 161,015) | = | 0.01 | 0.01 | × | 5.00% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 161,015) | 1.00 | 6.98% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 98,501) | 98,501) | ÷ | 137,139) | = | 0.72 | 0.72 | × | 8.50% | = | 6.10% | ||
| Debt3 | 36,946) | 36,946) | ÷ | 137,139) | = | 0.27 | 0.27 | × | 3.73% × (1 – 21.00%) | = | 0.79% | ||
| Operating lease liability4 | 1,692) | 1,692) | ÷ | 137,139) | = | 0.01 | 0.01 | × | 4.00% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 137,139) | 1.00 | 6.94% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 151,637) | 151,637) | ÷ | 188,301) | = | 0.81 | 0.81 | × | 8.50% | = | 6.84% | ||
| Debt3 | 35,267) | 35,267) | ÷ | 188,301) | = | 0.19 | 0.19 | × | 3.31% × (1 – 21.00%) | = | 0.49% | ||
| Operating lease liability4 | 1,397) | 1,397) | ÷ | 188,301) | = | 0.01 | 0.01 | × | 4.00% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 188,301) | 1.00 | 7.36% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 146,346) | 146,346) | ÷ | 196,673) | = | 0.74 | 0.74 | × | 8.50% | = | 6.32% | ||
| Debt3 | 49,284) | 49,284) | ÷ | 196,673) | = | 0.25 | 0.25 | × | 3.33% × (1 – 21.00%) | = | 0.66% | ||
| Operating lease liability4 | 1,043) | 1,043) | ÷ | 196,673) | = | 0.01 | 0.01 | × | 3.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 196,673) | 1.00 | 7.00% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Bristol-Myers Squibb 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 | 3,477) | (13,667) | 1,181) | (706) | 1,039) | |
| Invested capital2 | 59,271) | 62,654) | 67,562) | 71,720) | 80,284) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 5.87% | -21.81% | 1.75% | -0.98% | 1.29% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| AbbVie Inc. | 0.94% | -2.00% | -3.72% | 5.70% | 5.06% | |
| Amgen Inc. | 6.43% | -0.37% | 2.44% | 6.98% | 6.97% | |
| Danaher Corp. | -10.62% | -10.78% | -11.55% | -6.54% | -5.71% | |
| Eli Lilly & Co. | 30.39% | 14.74% | 1.66% | 8.76% | 10.42% | |
| Gilead Sciences Inc. | 12.84% | -10.25% | 3.06% | -0.06% | 6.94% | |
| Johnson & Johnson | 11.79% | 2.12% | 0.27% | 5.53% | 10.59% | |
| Merck & Co. Inc. | 10.73% | 13.61% | -8.69% | 11.50% | 11.65% | |
| Pfizer Inc. | -3.53% | -3.21% | -9.33% | 18.17% | 11.33% | |
| Regeneron Pharmaceuticals Inc. | 14.05% | 16.87% | 13.68% | 19.04% | 62.79% | |
| Thermo Fisher Scientific Inc. | -7.36% | -8.16% | -8.63% | -6.88% | -4.86% | |
| Vertex Pharmaceuticals Inc. | 21.06% | -22.59% | 11.36% | 14.11% | 15.32% | |
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 × 3,477 ÷ 59,271 = 5.87%
4 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 is characterized by a consistent reduction in the capital base contrasted with extreme volatility in value creation metrics. While the overall investment scale has contracted, the ability to generate returns above the cost of capital has fluctuated significantly, reaching a critical low in 2024 before rebounding in 2025.
- Invested Capital Trend
- A steady downward trajectory is observed in invested capital, which decreased from 80,284 million US dollars in 2021 to 59,271 million US dollars by 2025. This continuous decline indicates a sustained contraction of the capital base over the five-year period.
- Economic Profit Volatility
- Economic profit exhibited severe instability, alternating between positive and negative results. Following a modest loss in 2022 and a recovery in 2023, a substantial collapse occurred in 2024, with economic profit dropping to negative 13,667 million US dollars. A sharp recovery is noted in 2025, with the figure returning to a positive 3,477 million US dollars.
- Economic Spread Ratio Performance
- The economic spread ratio mirrors the volatility of economic profit, reflecting the margin by which returns deviated from the cost of capital. The ratio reached a severe low of -21.81% in 2024, indicating that returns were significantly below the required cost of capital. This was followed by a strong recovery in 2025, where the ratio expanded to 5.87%, the highest positive spread observed across the analyzed timeframe.
AI Ask an analyst for more
Economic Profit Margin
Bristol-Myers Squibb 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 | 3,477) | (13,667) | 1,181) | (706) | 1,039) | |
| Revenues | 48,194) | 48,300) | 45,006) | 46,159) | 46,385) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 7.21% | -28.30% | 2.62% | -1.53% | 2.24% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AbbVie Inc. | 0.94% | -2.46% | -4.67% | 8.06% | 8.64% | |
| Amgen Inc. | 10.72% | -0.74% | 6.35% | 11.18% | 11.55% | |
| Danaher Corp. | -32.53% | -33.27% | -37.91% | -16.24% | -14.27% | |
| Eli Lilly & Co. | 23.13% | 11.71% | 1.43% | 7.46% | 9.61% | |
| Gilead Sciences Inc. | 19.01% | -15.89% | 5.20% | -0.10% | 12.28% | |
| Johnson & Johnson | 17.29% | 2.54% | 0.31% | 6.63% | 11.08% | |
| Merck & Co. Inc. | 16.18% | 16.84% | -10.11% | 14.34% | 16.91% | |
| Pfizer Inc. | -7.88% | -6.83% | -24.26% | 19.89% | 12.10% | |
| Regeneron Pharmaceuticals Inc. | 12.98% | 14.80% | 12.47% | 19.17% | 42.46% | |
| Thermo Fisher Scientific Inc. | -15.56% | -15.61% | -17.23% | -12.68% | -9.89% | |
| Vertex Pharmaceuticals Inc. | 18.57% | -18.54% | 15.25% | 20.82% | 18.98% | |
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 × 3,477 ÷ 48,194 = 7.21%
3 Click competitor name to see calculations.
The financial performance regarding economic value added exhibits extreme volatility over the five-year period from 2021 to 2025. While revenues remained relatively stable, the economic profit and the resulting economic profit margin experienced significant fluctuations, characterized by alternating periods of value creation and value destruction.
- Revenue Stability
- Revenues showed minimal variance, fluctuating within a narrow range between 45,006 million USD and 48,300 million USD. This indicates that the volatility observed in economic profit is not driven by top-line revenue swings, but rather by changes in operating income or the cost of capital.
- Economic Profit Fluctuations
- Economic profit demonstrated an unstable trajectory, shifting from a positive 1,039 million USD in 2021 to a negative 706 million USD in 2022, before recovering to 1,181 million USD in 2023. A severe contraction occurred in 2024, where economic profit plummeted to -13,667 million USD, representing a substantial destruction of economic value. This was followed by a sharp recovery in 2025, reaching a period high of 3,477 million USD.
- Economic Profit Margin Analysis
- The economic profit margin mirrored the instability of the absolute economic profit. The margin moved from 2.24% in 2021 to a low of -28.30% in 2024. The stark contrast between the 2024 deficit and the 2025 peak of 7.21% suggests a significant anomalous event or restructuring charge in 2024, followed by a period of enhanced capital efficiency and profitability in 2025.
AI Ask an analyst for more