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.
Paying user area
Try for free
Chevron Corp. pages available for free this week:
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Chevron Corp. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Chevron Corp., economic profit calculation
US$ 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 in profitability, capital efficiency, and investment for the entity over the period from 2020 to 2024.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT showed a significant improvement from a negative value of approximately -$10.3 billion in 2020 to a positive peak of around $41.8 billion in 2022. However, this profit declined sharply in 2023 to approximately $19.5 billion and slightly increased to about $20.1 billion in 2024. The fluctuation indicates a strong recovery post-2020 followed by some erosion in profitability during the last two years.
- Cost of Capital
- The cost of capital increased steadily from 13.2% in 2020 to a peak of approximately 15.02% in 2022 and remained relatively stable near 15% through 2023 and 2024. This upward trend in cost of capital suggests a rising hurdle rate for investments, possibly reflecting changes in risk perception or market conditions.
- Invested Capital
- The amount of invested capital experienced some variability, decreasing slightly from about $197.3 billion in 2020 to $193.6 billion in 2021, before increasing to a high of roughly $212.3 billion in 2022 and 2023. There was a modest decline to approximately $208.4 billion in 2024. This pattern indicates a degree of capital reallocation or adjustment, with a general growth trend followed by a minor pullback.
- Economic Profit
- Economic profit remained negative in 2020 and 2021, with losses narrowing from about -$36.3 billion to -$8.4 billion. It turned positive in 2022, reaching approximately $9.9 billion, but reverted to negative figures in 2023 and 2024, at around -$12.4 billion and -$10.8 billion respectively. This suggests that despite operational profitability in some years, the returns did not consistently exceed the cost of capital, resulting in value destruction in most periods except 2022.
Overall, the data indicates a recovery phase in operating profit after a challenging year in 2020, but this improvement was not sustained through 2023 and 2024. The cost of capital increased and remained elevated, exerting pressure on economic profit, which was mostly negative except for 2022. Invested capital levels displayed a mild upward trend with recent moderation. These elements together imply challenges in generating value above capital costs in recent years despite operational profitability gains during some periods.
Net Operating Profit after Taxes (NOPAT)
Chevron Corp., NOPAT calculation
US$ 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 allowance.
3 Addition of increase (decrease) in LIFO reserve. See details »
4 Addition of increase (decrease) in accrued severance liability.
5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Chevron Corporation.
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2024 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income (loss) attributable to Chevron Corporation.
The data reveals notable fluctuations in profitability metrics over the observed five-year period. Initially, both net income and net operating profit after taxes (NOPAT) were negative in 2020, indicating a challenging financial environment or operational difficulties that year.
A significant turnaround is apparent in 2021, where both net income and NOPAT transition to positive figures. Net income improves markedly from a loss of 5,543 million US dollars in 2020 to a gain of 15,625 million US dollars in 2021. Similarly, NOPAT moves from a negative 10,295 million US dollars to a positive 19,443 million US dollars. This change suggests improved operational performance and profitability.
The positive trend continues into 2022, with net income reaching its highest point at 35,465 million US dollars and NOPAT following suit with 41,794 million US dollars. This peak indicates a period of especially strong financial results, likely driven by favorable market conditions or operational efficiencies.
Subsequently, both metrics decrease in 2023 but remain positive, with net income declining to 21,369 million US dollars and NOPAT dropping to 19,473 million US dollars. Although reduced from the previous year, these levels still reflect solid profitability.
In 2024, the trend stabilizes with a slight decrease in net income to 17,661 million US dollars, while NOPAT marginally rises to 20,090 million US dollars. The relatively stable results in the final year suggest an adjustment phase or normalization after the previous years' volatility.
- Overall Trend
- Initially negative performance in 2020, followed by a significant recovery and peak in 2022, then a moderated but stable profitability in subsequent years.
- Net Income
- Shifted from a substantial loss in 2020 to a peak in 2022, followed by a decline though maintaining positive levels through 2024.
- Net Operating Profit After Taxes (NOPAT)
- Mirrored the net income pattern with negative values in 2020, peaking in 2022, and settling at stable positive levels thereafter.
- Financial Implications
- The significant improvements from 2020 to 2022 imply successful management initiatives or external factors favoring profitability, while the subsequent moderate decrease points to normalization or increased market pressures.
Cash Operating Taxes
Chevron Corp., 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 a significant fluctuation in the income tax expense (benefit) over the five-year period ending December 31, 2024. In 2020, a negative income tax expense value indicates a tax benefit, contrasting sharply with subsequent years where the figures show a tax expense. The income tax expense rose markedly from 5,950 million USD in 2021 to a peak of 14,066 million USD in 2022. This was followed by a decline to 8,173 million USD in 2023, and then a slight increase to 9,757 million USD in 2024.
Cash operating taxes exhibit a broadly similar trend to income tax expense, with amounts generally increasing over the period. Starting from 1,885 million USD in 2020, cash operating taxes rose substantially to 5,416 million USD in 2021, nearly doubling to 12,067 million USD in 2022. Thereafter, cash operating taxes decreased to 7,986 million USD in 2023, before modestly rising again to 8,681 million USD in 2024.
- Income Tax Expense (Benefit)
- Displayed volatility between 2020 and 2024, with a reversal from a tax benefit in 2020 to substantial tax expenses in following years. This indicates varied taxable income or changes in tax-related factors.
- Cash Operating Taxes
- Demonstrated a consistent upward trajectory from 2020 to 2022, peaking in 2022, followed by a notable decline in 2023 and a partial rebound in 2024, reflecting fluctuations in operational taxable activities or possibly changes in tax rates or policy implementations.
- General Observation
- The parallel movement of income tax expense and cash operating taxes suggests alignment between accounting reported tax obligations and actual cash tax payments. Both measures peaked in 2022, indicating possibly the highest taxable earnings or less favorable tax conditions during that year, before adjusting downward in 2023 and slightly increasing thereafter.
Invested Capital
Chevron Corp., 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 LIFO reserve. See details »
5 Addition of accrued severance liability.
6 Addition of equity equivalents to total Chevron Corporation stockholders’ equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of marketable securities.
The data reveals several noteworthy trends across the financial metrics over the five-year period ending December 31, 2024.
- Total reported debt & leases
- There was a significant reduction in total reported debt and leases from 48,221 million US dollars in 2020 to 27,370 million in 2022. This downward trend continued in 2023 reaching 26,070 million, but there was a slight increase to 29,611 million in 2024. Overall, the company appears to have actively managed its debt, substantially lowering its obligations in the earlier years before a moderate rise in the final year.
- Total Chevron Corporation stockholders’ equity
- Stockholders' equity showed a consistent upward trajectory from 131,688 million US dollars in 2020 to a peak of 160,957 million in 2023. However, in 2024, equity decreased slightly to 152,318 million. This pattern suggests a generally healthy growth in equity, reflecting retained earnings or increases in capital, with a minor decline in the most recent year which could warrant further examination.
- Invested capital
- Invested capital experienced fluctuations during the period studied. It started at 197,314 million US dollars in 2020, saw a marginal decline to 193,606 million in 2021, followed by an increase to 212,342 million in 2022. The figure remained virtually unchanged in 2023 at 212,337 million, before slightly decreasing to 208,395 million in 2024. This indicates an overall stable level of capital investment, with periods of both expansion and modest contraction.
In summary, while debt levels decreased significantly in the initial years, there was a rebound in the latest year. Shareholders’ equity grew steadily until a slight pullback in the last year. Invested capital remained relatively stable with minor variations. These trends imply active financial management focusing on reducing leverage and maintaining shareholder value, with some adjustments apparent in the most recent period.
Cost of Capital
Chevron Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (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. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Chevron Corp., 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 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil 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 data over the five-year period reveals several notable trends and shifts in key metrics.
- Economic Profit
- The economic profit showed considerable fluctuation throughout the period. It started with a significant negative value of -36,347 million US dollars in 2020, indicating that the company was generating less profit than the cost of capital. This loss substantially decreased in 2021 to -8,444 million US dollars, implying an improvement in profitability. In 2022, there was a positive economic profit of 9,892 million US dollars, marking a recovery and value creation above the cost of capital. However, the trend reversed again in the following years, with economic profit declining to -12,390 million in 2023 and slightly improving to -10,808 million in 2024, indicating renewed economic losses but less severe than the initial 2020 figure.
- Invested Capital
- The invested capital demonstrated a relatively stable pattern with minor fluctuations. It decreased slightly from 197,314 million US dollars in 2020 to 193,606 million in 2021, then increased notably to 212,342 million in 2022. The figure remained nearly flat in 2023 at 212,337 million and experienced a small decrease in 2024 to 208,395 million. This suggests the company maintained a consistently high level of capital investment, possibly supporting operational capacity or strategic initiatives.
- Economic Spread Ratio
- The economic spread ratio, which measures the difference between return on invested capital and cost of capital as a percentage, closely parallels the economic profit trend. It was significantly negative at -18.42% in 2020, indicating substantial value destruction. This ratio improved in 2021 to -4.36%, approaching breakeven, and moved into positive territory at 4.66% in 2022, reflecting effective capital utilization and value creation. However, negative performance resumed in the last two years, with ratios of -5.84% in 2023 and -5.19% in 2024, reflecting declining returns relative to capital costs and indicating a period of diminished economic value.
Overall, the period exhibits pronounced volatility in economic profitability and returns on invested capital. Despite maintaining a relatively high invested capital base, the company experienced significant swings between value destruction and creation. The year 2022 stands out as an anomalous recovery phase, while the surrounding years reflect challenges in generating returns above capital costs.
Economic Profit Margin
Chevron Corp., 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 | ||||||
| Sales and other operating revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil 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 ÷ Sales and other operating revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit showed significant volatility over the observed periods. It started with a considerable negative value of -36,347 million US dollars at the end of 2020, indicating a sizable loss. This negative trend improved substantially in 2021, reaching -8,444 million US dollars, suggesting a reduction in economic losses. In 2022, economic profit turned positive at 9,892 million US dollars, reflecting a marked improvement in value creation. However, in 2023 and 2024, the economic profit reverted to negative figures, -12,390 million and -10,808 million US dollars respectively, indicating renewed challenges in generating economic profit.
- Sales and Other Operating Revenues
- Sales and other operating revenues exhibited consistent growth from 2020 through 2022. Revenues increased from 94,471 million US dollars in 2020 to a peak of 235,717 million US dollars in 2022, more than doubling over this period. However, in the subsequent years 2023 and 2024, revenues declined, falling to 196,913 million and then slightly further to 193,414 million US dollars. Despite the decrease, the revenues in these years remained significantly above the 2020 level, indicating an overall upward trajectory with some recent contraction.
- Economic Profit Margin
- The economic profit margin mirrored the pattern observed in economic profit values. It was substantially negative in 2020 at -38.47%, indicating pronounced inefficiency or loss generation relative to sales. The margin improved sharply in 2021 to -5.43%, nearing breakeven. In 2022, the margin achieved a positive 4.2%, consistent with the positive economic profit recorded that year. The margin then decreased again in 2023 and 2024 to -6.29% and -5.59% respectively, signaling a return to negative profitability levels relative to revenues, although these negative margins were less severe than in 2020.