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
Coca-Cola 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
= 14,042 – 9.18% × 92,902 = 5,511
The financial performance from 2021 to 2025 reflects a period of initial volatility followed by significant growth in economic value creation. While economic profit experienced a decline in the mid-period, a substantial recovery is evident by the conclusion of the analyzed timeframe.
- Net Operating Profit After Taxes (NOPAT)
- A fluctuation is observed in NOPAT, which decreased from 11,202 million USD in 2021 to 10,120 million USD in 2022. Following this dip, a gradual recovery occurred through 2024, culminating in a sharp increase to 14,042 million USD by 2025, representing a significant expansion in operational profitability.
- Cost of Capital
- A consistent upward trend in the cost of capital is noted, rising steadily from 8.75% in 2021 to 9.18% in 2025. This incremental increase indicates a rising hurdle rate for investments, which placed continuous pressure on the generation of economic profit throughout the period.
- Invested Capital
- Invested capital remained relatively stable between 2021 and 2022 but entered a phase of sustained growth thereafter. The capital base expanded from 80,311 million USD in 2021 to 92,902 million USD in 2025, suggesting an increase in the asset base to support operational scaling.
- Economic Profit
- Economic profit exhibited a volatile trajectory, falling from 4,174 million USD in 2021 to 2,928 million USD in 2022. Despite a marginal recovery in 2023 and a subsequent slight decline to 3,016 million USD in 2024, the figure surged to 5,511 million USD in 2025. This final peak indicates that the increase in NOPAT significantly outpaced the combined impact of the growing invested capital base and the rising cost of capital.
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Net Operating Profit after Taxes (NOPAT)
Coca-Cola 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 allowances.
3 Addition of increase (decrease) in accrued expenses related to restructuring.
4 Addition of increase (decrease) in equity equivalents to net income attributable to shareowners of The Coca-Cola Company.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,722 × 3.90% = 67
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,721 × 21.00% = 361
7 Addition of after taxes interest expense to net income attributable to shareowners of The Coca-Cola Company.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,215 × 21.00% = 255
9 Elimination of after taxes investment income.
Net income attributable to shareowners and net operating profit after taxes (NOPAT) exhibited distinct patterns over the five-year period. While net income experienced fluctuations, NOPAT demonstrated a generally positive trajectory, particularly in the later years.
- NOPAT Trend
- NOPAT decreased from US$11,202 million in 2021 to US$10,120 million in 2022, representing a decline of approximately 9.6%. This was followed by a period of relative stability, with NOPAT reaching US$10,884 million in 2023 and US$10,945 million in 2024. A significant increase is then observed in 2025, with NOPAT rising to US$14,042 million. This represents a substantial year-over-year growth of approximately 28.3% from 2024.
- Net Income Trend
- Net income attributable to shareowners decreased from US$9,771 million in 2021 to US$9,542 million in 2022, a decrease of approximately 2.4%. It then increased to US$10,714 million in 2023, followed by a slight decrease to US$10,631 million in 2024. A notable increase occurred in 2025, with net income reaching US$13,107 million, representing a 23.3% increase from 2024.
- Relationship between NOPAT and Net Income
- While both metrics generally trended upwards from 2022 to 2025, NOPAT consistently exceeded net income attributable to shareowners throughout the observed period. The difference between the two metrics suggests the presence of significant non-operating items or differences in accounting treatment impacting reported net income. The larger increase in NOPAT in 2025, compared to net income, further emphasizes this divergence.
The observed increase in both NOPAT and net income in 2025 warrants further investigation to determine the underlying drivers of this growth. The initial decline in NOPAT in 2022 also merits attention to understand the contributing factors and whether they represent a temporary fluctuation or a more persistent issue.
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Cash Operating Taxes
Coca-Cola Co., cash operating taxes calculation
US$ 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 reported income taxes and cash operating taxes exhibit distinct patterns over the five-year period. Income taxes generally increased, while cash operating taxes demonstrated more fluctuation.
- Income Taxes
- Income taxes decreased from US$2,621 million in 2021 to US$2,115 million in 2022, representing a notable decline. Subsequently, income taxes increased each year, reaching US$2,861 million in 2025. This indicates a consistent upward trend in reported income taxes following the initial decrease.
- Cash Operating Taxes
- Cash operating taxes increased significantly from US$1,907 million in 2021 to US$2,414 million in 2022. This was followed by a slight decrease to US$2,314 million in 2023. Further increases were observed in 2024, reaching US$2,529 million, before a modest decline to US$2,450 million in 2025. The pattern suggests a generally higher level of cash taxes compared to the earlier period, with some year-to-year variability.
- Relationship between Income Taxes and Cash Operating Taxes
- While both metrics generally trended upwards over the period, cash operating taxes were consistently lower than reported income taxes in each year. The difference between the two varied, but suggests the presence of timing differences or non-cash tax items impacting the reported income tax expense. The gap narrowed in 2022 and 2023, then widened again in 2024 and 2025.
The fluctuations in cash operating taxes may warrant further investigation to understand the underlying drivers, such as changes in tax credits, deferred tax assets/liabilities, or tax planning strategies. The increasing trend in income taxes, despite the variability in cash taxes, suggests a growing tax burden overall.
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Invested Capital
Coca-Cola Co., invested capital calculation (financing approach)
US$ 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 accrued expenses related to restructuring.
5 Addition of equity equivalents to equity attributable to shareowners of The Coca-Cola Company.
6 Removal of accumulated other comprehensive income.
7 Subtraction of marketable securities.
The reported invested capital exhibited an overall increasing trend throughout the observed period. While fluctuations occurred, the company consistently reinvested in its operations, as reflected in the growth of invested capital from 2021 to 2025.
- Total Reported Debt & Leases
- Total reported debt and leases decreased from US$44,232 million in 2021 to US$40,603 million in 2022, indicating a reduction in financial leverage. However, debt levels subsequently increased, reaching US$47,214 million by 2025. This suggests a renewed reliance on debt financing in later years, potentially to fund expansion or acquisitions.
- Equity Attributable to Shareowners
- Equity attributable to shareowners demonstrated growth from US$22,999 million in 2021 to US$25,941 million in 2023. A slight decrease was observed in 2024, falling to US$24,856 million, before a substantial increase to US$32,169 million in 2025. This indicates strengthening shareholder equity, with a particularly significant boost in the final year of the period.
- Invested Capital
- Invested capital remained relatively stable between 2021 and 2022, fluctuating around US$80 billion. A noticeable increase occurred in 2023, reaching US$83,542 million, and continued upward through 2025, culminating in US$92,902 million. This consistent growth suggests ongoing investment in the business, potentially through a combination of debt and equity financing. The increase in invested capital outpaced the growth in equity during the latter part of the period, indicating a greater reliance on debt to fund these investments.
The interplay between debt and equity in financing invested capital warrants further investigation. The increasing debt levels alongside growing invested capital suggest a potential shift in the company’s capital structure. The substantial increase in equity in 2025 may indicate successful profitability or strategic financial maneuvers.
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Cost of Capital
Coca-Cola Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 343,370) | 343,370) | ÷ | 386,028) | = | 0.89 | 0.89 | × | 10.00% | = | 8.89% | ||
| Debt3 | 40,936) | 40,936) | ÷ | 386,028) | = | 0.11 | 0.11 | × | 3.32% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 1,722) | 1,722) | ÷ | 386,028) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 386,028) | 1.00 | 9.18% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | 301,242) | 301,242) | ÷ | 342,006) | = | 0.88 | 0.88 | × | 10.00% | = | 8.80% | ||
| Debt3 | 39,551) | 39,551) | ÷ | 342,006) | = | 0.12 | 0.12 | × | 3.44% × (1 – 21.00%) | = | 0.31% | ||
| Operating lease liability4 | 1,213) | 1,213) | ÷ | 342,006) | = | 0.00 | 0.00 | × | 3.70% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 342,006) | 1.00 | 9.13% | ||||||||||
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 | 261,766) | 261,766) | ÷ | 301,130) | = | 0.87 | 0.87 | × | 10.00% | = | 8.69% | ||
| Debt3 | 38,002) | 38,002) | ÷ | 301,130) | = | 0.13 | 0.13 | × | 3.59% × (1 – 21.00%) | = | 0.36% | ||
| Operating lease liability4 | 1,362) | 1,362) | ÷ | 301,130) | = | 0.00 | 0.00 | × | 3.40% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 301,130) | 1.00 | 9.06% | ||||||||||
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 | 258,736) | 258,736) | ÷ | 295,261) | = | 0.88 | 0.88 | × | 10.00% | = | 8.76% | ||
| Debt3 | 35,071) | 35,071) | ÷ | 295,261) | = | 0.12 | 0.12 | × | 2.40% × (1 – 21.00%) | = | 0.23% | ||
| Operating lease liability4 | 1,454) | 1,454) | ÷ | 295,261) | = | 0.00 | 0.00 | × | 2.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 295,261) | 1.00 | 9.00% | ||||||||||
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 | 270,013) | 270,013) | ÷ | 315,102) | = | 0.86 | 0.86 | × | 10.00% | = | 8.57% | ||
| Debt3 | 43,618) | 43,618) | ÷ | 315,102) | = | 0.14 | 0.14 | × | 1.61% × (1 – 21.00%) | = | 0.18% | ||
| Operating lease liability4 | 1,471) | 1,471) | ÷ | 315,102) | = | 0.00 | 0.00 | × | 2.70% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 315,102) | 1.00 | 8.75% | ||||||||||
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
Coca-Cola 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 | 5,511) | 3,016) | 3,316) | 2,928) | 4,174) | |
| Invested capital2 | 92,902) | 86,857) | 83,542) | 79,959) | 80,311) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 5.93% | 3.47% | 3.97% | 3.66% | 5.20% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Mondelēz International Inc. | -3.78% | 0.04% | -0.12% | -3.93% | -0.92% | |
| PepsiCo Inc. | 2.72% | 5.30% | 4.22% | 4.19% | 4.75% | |
| Philip Morris International Inc. | 13.11% | 8.14% | 8.81% | 11.75% | 26.08% | |
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 × 5,511 ÷ 92,902 = 5.93%
4 Click competitor name to see calculations.
The analysis of the economic value added indicators reveals a period of volatility in value creation between 2021 and 2024, followed by a significant expansion in 2025. While the capital base expanded steadily over the five-year period, the ability to generate economic profit fluctuated, impacting the overall efficiency of capital deployment as measured by the economic spread ratio.
- Economic Profit
- Economic profit exhibited considerable variance, beginning at 4,174 million USD in 2021 and declining to 2,928 million USD in 2022. A moderate recovery occurred in 2023, reaching 3,316 million USD, before a slight contraction to 3,016 million USD in 2024. However, a substantial increase is observed in 2025, with economic profit peaking at 5,511 million USD, indicating a strong surge in value creation above the cost of capital.
- Invested Capital
- Invested capital maintained a consistent upward trajectory after a marginal dip in 2022. From a base of 80,311 million USD in 2021, the invested capital grew to 92,902 million USD by 2025. This steady increase suggests a continuous commitment to capital investment and asset base expansion.
- Economic Spread Ratio
- The economic spread ratio reflects the efficiency of the invested capital in generating surplus value. The ratio declined from 5.20% in 2021 to a low of 3.47% in 2024, coinciding with the period of fluctuating economic profits and growing invested capital. A sharp reversal is noted in 2025, where the ratio rose to 5.93%, the highest level in the observed period. This indicates that the growth in economic profit in 2025 significantly outpaced the growth in invested capital, resulting in enhanced capital productivity.
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Economic Profit Margin
Coca-Cola 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 | 5,511) | 3,016) | 3,316) | 2,928) | 4,174) | |
| Net operating revenues | 47,941) | 47,061) | 45,754) | 43,004) | 38,655) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 11.49% | 6.41% | 7.25% | 6.81% | 10.80% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Mondelēz International Inc. | -6.03% | 0.06% | -0.21% | -7.96% | -1.98% | |
| PepsiCo Inc. | 2.41% | 4.43% | 3.46% | 3.37% | 4.17% | |
| Philip Morris International Inc. | 17.19% | 10.38% | 12.87% | 17.52% | 24.21% | |
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 ÷ Net operating revenues
= 100 × 5,511 ÷ 47,941 = 11.49%
3 Click competitor name to see calculations.
An analysis of the financial performance between 2021 and 2025 reveals a consistent growth in top-line revenue contrasted by significant volatility in economic value creation. While net operating revenues maintained a steady upward trajectory, the ability to generate economic profit experienced a period of contraction and fluctuation before reaching a peak in the final year of the period.
- Net Operating Revenues
- A sustained growth pattern is evident, with revenues increasing from 38,655 million US$ in 2021 to 47,941 million US$ by 2025. This represents a continuous expansion of the operational scale over the five-year period.
- Economic Profit
- Economic profit exhibited substantial volatility. After a decline from 4,174 million US$ in 2021 to 2,928 million US$ in 2022, the figure fluctuated between 3,016 million US$ and 3,316 million US$ through 2024. A significant surge occurred in 2025, where economic profit reached its highest point at 5,511 million US$, indicating a substantial increase in value creation above the cost of capital.
- Economic Profit Margin
- The economic profit margin closely mirrored the volatility of absolute economic profit. The margin dropped from 10.80% in 2021 to a low of 6.41% in 2024, reflecting a period where revenue growth did not translate proportionally into economic value. However, a sharp recovery is observed in 2025, with the margin rising to 11.49%, the highest level recorded in the analyzed timeframe, suggesting improved capital efficiency and profitability relative to the cost of capital.
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