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
Coca-Cola Co. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Coca-Cola Co. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Coca-Cola Co., economic profit calculation
US$ 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 analysis of the annual financial data reveals several important trends regarding profitability, cost efficiency, and capital investment over the five-year period.
- Net Operating Profit After Taxes (NOPAT)
-
The NOPAT showed a significant increase from 2020 to 2021, rising from 8,649 million US dollars to 11,202 million US dollars. This was followed by a decrease in 2022 to 10,120 million US dollars. Subsequently, NOPAT rose again to 10,884 million US dollars in 2023 and remained relatively stable in 2024 at 10,945 million US dollars. Overall, the profit after taxes experienced initial strong growth, some volatility, and a stabilizing trend in the latter years.
- Cost of Capital
-
The cost of capital increased steadily each year, starting at 9.26% in 2020 and gradually rising to 10.01% by 2024. This upward trend indicates a growing expense related to financing the company's assets, which could exert pressure on profitability if not offset by corresponding gains in returns or operational efficiency.
- Invested Capital
-
Invested capital expanded over the period, beginning at 75,674 million US dollars in 2020 and increasing each year to reach 86,857 million US dollars in 2024. The growth in invested capital suggests ongoing investment activities and asset accumulation, which may be intended to support business growth and operational capacity.
- Economic Profit
-
Economic profit experienced substantial growth from 1,637 million US dollars in 2020 to a peak of 3,484 million US dollars in 2021, indicating a strong value creation exceeding the cost of capital. However, economic profit declined to 2,225 million US dollars in 2022, then moderately increased in 2023 to 2,587 million US dollars before decreasing again to 2,249 million US dollars in 2024. Despite fluctuations, the company maintained positive economic profit throughout, suggesting sustained generation of returns above capital costs.
In summary, the company demonstrated growth in operating profitability and invested capital, accompanied by an increasing cost of capital. Economic profit trends reflect value creation with some variability, highlighting the importance of managing capital efficiency alongside profit growth. The stabilization of NOPAT and positive economic profit in recent years indicate a consistent, although moderated, performance level.
Net Operating Profit after Taxes (NOPAT)
Coca-Cola 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 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 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income attributable to shareowners of The Coca-Cola Company.
8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
- Net Income Attributable to Shareowners
-
The net income attributable to shareowners shows a generally positive trend over the five-year period. Starting at 7,747 million US dollars at the end of 2020, there was a significant increase to 9,771 million in 2021. Although the net income slightly declined to 9,542 million in 2022, it rebounded in 2023 to reach the highest value of 10,714 million. A marginal decrease occurred again in 2024, with net income at 10,631 million, which still represents a notable improvement compared to the initial figure in 2020.
- Net Operating Profit After Taxes (NOPAT)
-
The NOPAT figures also demonstrate an upward trajectory with some fluctuations. Beginning at 8,649 million US dollars in 2020, there was an increase to 11,202 million in 2021. This was followed by a decline to 10,120 million in 2022. Subsequently, NOPAT rose again to 10,884 million in 2023 and continued to increase slightly to 10,945 million by the end of 2024. Overall, the NOPAT values reflect growth over the period, despite the intermittent decreases.
- Comparative Insights
-
Both net income and NOPAT exhibited growth from 2020 through 2024, though neither metric maintained a strictly linear progression. The year 2021 marked a peak for both measures within the period, followed by declines in 2022. Recovery occurred in subsequent years, with net income reaching a maximum in 2023 before a slight drop in 2024, whereas NOPAT progressed to its highest point at the end of 2024. These trends suggest volatility but overall improved profitability and operational efficiency over the five-year span.
Cash Operating Taxes
Coca-Cola 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).
- Income Taxes
- Income taxes show a fluctuating trend over the reported periods. The value increased significantly from 1981 million US dollars in 2020 to 2621 million in 2021, indicating a rise in tax expenses. However, in 2022, there was a notable decrease to 2115 million US dollars. From 2022 onward, the income taxes resumed an upward trajectory, reaching 2249 million in 2023 and further increasing to 2437 million in 2024. Overall, the trend exhibits variability with a dip in 2022 amid a general tendency to increase.
- Cash Operating Taxes
- Cash operating taxes demonstrated a somewhat irregular pattern over the five-year span. Starting at 2201 million US dollars in 2020, there was a decline to 1907 million in 2021, suggesting reduced cash tax payments despite the prior increase in income taxes. The figure rebounded sharply in 2022 to 2414 million, surpassing the initial 2020 value. Slight reductions followed in 2023 to 2314 million, but the amount rose again in 2024, reaching the highest point of 2529 million US dollars. These fluctuations may reflect changes in taxable income, timing differences, or tax planning actions affecting cash tax outflows.
Invested Capital
Coca-Cola 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 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.
- Total reported debt & leases
-
This financial metric experienced a general decline from 44,415 million US dollars in 2020 to 40,603 million US dollars in 2022. However, a reversal of this trend is observed in the subsequent years, with debt rising to 43,426 million US dollars in 2023 and continuing to increase to 45,735 million US dollars in 2024. This indicates an initial reduction in the company's leverage followed by a renewed accumulation of debt and lease obligations in the last two reported periods.
- Equity attributable to shareowners of The Coca-Cola Company
-
Equity shows a consistent upward trend from 19,299 million US dollars in 2020, rising to 22,999 million in 2021, further increasing to 24,105 million in 2022, and reaching its peak at 25,941 million in 2023. However, a slight decrease to 24,856 million occurs in 2024. Overall, the equity base has strengthened significantly over the period, reflecting potential retained earnings growth or capital infusions, despite a modest decline in the final year.
- Invested capital
-
Invested capital generally increased over the entire period. Starting from 75,674 million US dollars in 2020, it grew steadily to 80,311 million in 2021. A slight dip followed in 2022 to 79,959 million, but the upward momentum resumed with figures rising to 83,542 million in 2023 and 86,857 million in 2024. This suggests ongoing investment activities, possibly including both debt and equity financing components, resulting in a growing capital base employed by the company.
Cost of Capital
Coca-Cola Co., 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
Coca-Cola 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 | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 notable fluctuations over the five-year period. It significantly increased from 1,637 million USD in 2020 to a peak of 3,484 million USD in 2021. However, it subsequently declined to 2,225 million USD in 2022, followed by a moderate recovery in 2023 to 2,587 million USD, before decreasing again to 2,249 million USD in 2024. This pattern highlights some volatility in the company's ability to generate returns above its cost of capital.
- Invested Capital
- Invested capital exhibited a generally upward trend across the years. Starting at 75,674 million USD in 2020, invested capital increased consistently to 86,857 million USD by the end of 2024. The steady growth in invested capital suggests ongoing investment and asset expansion within the company, indicating continued commitment to capacity or capability growth.
- Economic Spread Ratio
- The economic spread ratio, representing the margin by which return on invested capital exceeds the cost of capital, followed a pattern similar to economic profit. It rose sharply from 2.16% in 2020 to 4.34% in 2021, reflecting enhanced profitability relative to cost of capital. Thereafter, the ratio decreased over the following years to 2.78% in 2022, then slightly improved to 3.1% in 2023, before declining again to 2.59% in 2024. This indicates that, despite the overall growth in invested capital, the company's efficiency in generating surplus returns experienced some weakening after 2021.
- Overall Analysis
- The financial data reveals a period of strong performance with peak economic profit and economic spread ratio in 2021, likely reflecting optimal operating conditions or favorable market factors during that year. However, subsequent years show a reversion towards more moderate profitability despite continuous increases in invested capital. This could imply challenges in maintaining the higher margin of returns relative to the cost of capital, potentially due to rising costs, competitive pressures, or diminishing returns on new investments. The consistent growth in invested capital, paired with fluctuating economic profit and spread ratios, suggests that while the company is expanding its asset base, achieving commensurate returns remains a variable outcome.
Economic Profit Margin
Coca-Cola 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 | ||||||
| Net operating revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 ÷ Net operating revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reveals several trends regarding profitability and revenue generation over the five-year period.
- Net Operating Revenues
- There is a consistent upward trend in net operating revenues from 2020 to 2024. Revenue increased from 33,014 million US dollars in 2020 to 47,061 million in 2024, representing steady growth each year. This indicates successful revenue expansion efforts and a positive market presence.
- Economic Profit
- The economic profit shows a more volatile pattern compared to revenues. Starting at 1,637 million US dollars in 2020, economic profit more than doubled to 3,484 million in 2021, suggesting a significant improvement in operational efficiency or cost management. However, it declined to 2,225 million in 2022, slightly rose again to 2,587 million in 2023, and then decreased to 2,249 million in 2024. This fluctuation indicates variations in underlying profit generation despite rising revenues.
- Economic Profit Margin
- The economic profit margin follows a similar pattern to economic profit. It almost doubled from 4.96% in 2020 to 9.01% in 2021, reflecting a marked increase in profitability relative to revenues. The margin then decreased sharply to 5.17% in 2022, slightly improved to 5.66% in 2023, and declined again to 4.78% in 2024. This suggests profitability pressures or increased costs relative to revenues over the period.
Overall, while the company has demonstrated solid revenue growth, the economic profit and associated margin exhibit volatility, with a peak in 2021 followed by declines in subsequent years. This indicates that despite expanding revenue, challenges in sustaining profitability and managing operational costs have impacted economic profit performance.