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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Corning Inc. pages available for free this week:
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Price to FCFE (P/FCFE)
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Analysis of Revenues
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Economic Profit
Corning Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes showed an increasing trend from 2019 to 2021, rising from 968 million US dollars to a peak of 2,088 million in 2021. However, this was followed by a significant decline in the subsequent years, dropping to 1,544 million in 2022 and further declining to 817 million in 2023.
- Cost of Capital
- The cost of capital exhibited a gradual upward trend from 11.43% in 2019, reaching its highest point at 13.26% in 2022. In 2023, it decreased slightly to 12.8%, remaining higher than the initial 2019 rate.
- Invested Capital
- Invested capital increased from 18,872 million US dollars in 2019 to 21,233 million in 2020. Following this, it showed a decline in 2021 and 2022, falling to 19,716 million and 19,666 million respectively. In 2023, a moderate increase occurred with invested capital rising to 20,411 million.
- Economic Profit
- Economic profit was negative throughout the entire period and exhibited a worsening trend overall. Starting at -1,190 million US dollars in 2019, the negative value lessened to -490 million in 2021, suggesting an improvement. However, economic profit deteriorated markedly in the following years to -1,064 million in 2022 and further plummeted to -1,796 million in 2023.
- Summary of Insights
- The data reflects an initial phase of improved profitability until 2021, indicated by rising NOPAT and a decreasing negative economic profit. Conversely, in subsequent years, the profitability declined significantly along with worsening economic profit and a generally high cost of capital. The invested capital fluctuated, with a peak in 2020, a subsequent decline, and a moderate recovery in 2023. The persistent negative economic profit, despite variations in invested capital and NOPAT, indicates challenges in generating returns above the cost of capital, particularly in the latest years of the data.
Net Operating Profit after Taxes (NOPAT)
Corning Inc., NOPAT calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in doubtful accounts.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income attributable to Corning Incorporated.
5 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2023 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 Corning Incorporated.
8 2023 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 Corning Incorporated
- The net income shows a fluctuating trend over the five-year period. It decreased notably from 960 million US dollars in 2019 to 512 million in 2020, indicating a significant reduction in profitability during that year. The following year, 2021, saw a strong recovery with net income rising sharply to 1,906 million US dollars, the highest value in the analyzed time frame. However, in 2022, net income declined again to 1,316 million US dollars, and this downward trend continued into 2023, reaching 581 million US dollars, which is the second lowest value in the data. Overall, there is considerable volatility, with a peak in 2021 and declines before and after that year.
- Net operating profit after taxes (NOPAT)
- The NOPAT figures exhibit a different pattern compared to net income. Starting at 968 million US dollars in 2019, there is a marked increase to 1,761 million in 2020, indicating improved operating efficiency or reduced tax expenses during that year. The upward movement continues into 2021, reaching 2,088 million US dollars, the highest point in the sequence, which aligns with the peak net income year. However, this positive trajectory reverses from 2021 onward, with NOPAT decreasing to 1,544 million in 2022 and further down to 817 million in 2023. While the decline is notable, NOPAT remains substantially higher in 2023 compared to 2019, reflecting an overall improvement in operating profitability despite recent reductions.
- Comparative insights
- Comparing net income and NOPAT reveals potential discrepancies, possibly due to non-operating factors or tax-related items affecting net income more significantly. In 2020, net income fell sharply, whereas NOPAT increased substantially, suggesting that operational performance improved despite a lower bottom-line profit. The peak in both metrics in 2021 signals a strong year for both operating and net profitability. Subsequent declines in 2022 and 2023 indicate challenges impacting both operating profits and net income, though NOPAT's decline is less severe than that of net income, suggesting that non-operating expenses or taxes could have adversely affected net income in the later years.
Cash Operating Taxes
Corning Inc., cash operating taxes calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
- Provision for Income Taxes
- The provision for income taxes exhibited a fluctuating trend over the analyzed period. It decreased significantly from 256 million US dollars in 2019 to 111 million US dollars in 2020. Subsequently, there was a substantial increase reaching 491 million US dollars in 2021. After this peak, the provision decreased to 411 million US dollars in 2022 and further declined to 168 million US dollars in 2023. Overall, the provision showed volatility with considerable variations year over year, indicating changes in taxable income or adjustments in tax liabilities.
- Cash Operating Taxes
- Cash operating taxes followed a somewhat parallel but less volatile pattern compared to the provision for income taxes. Starting at 494 million US dollars in 2019, the amount dropped to its lowest value of 192 million in 2020. It then rose sharply to 542 million in 2021, slightly decreased to 523 million in 2022, and further declined to 313 million in 2023. This trend suggests some level of recovery in tax payments after the initial decline but a decreasing trend in the latter two years, which may reflect variations in operational profitability or cash flow management related to tax obligations.
Invested Capital
Corning Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
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 deferred revenue.
5 Addition of equity equivalents to total Corning Incorporated shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
The financial data reveals distinct trends in debt, equity, and invested capital over the five-year period.
- Total reported debt & leases
- The total debt and leases increased from approximately $8.25 billion in 2019 to $8.70 billion in 2020, indicating a rise in financial obligations during that year. Subsequently, it decreased to $7.83 billion in 2021 and remained relatively stable in 2022 at $7.82 billion. In 2023, the figure rose again to about $8.48 billion. This pattern suggests some fluctuations in leverage, with a general tendency to manage debt levels downward after 2020, followed by a renewed increase in 2023.
- Total shareholders’ equity
- Shareholders’ equity demonstrated a declining trend over the period. Starting at approximately $12.9 billion in 2019, equity rose slightly to $13.3 billion in 2020 but decreased thereafter, reaching $12.3 billion in 2021, $12.0 billion in 2022, and further declining to $11.6 billion in 2023. This consistent decrease from 2020 onwards indicates potential challenges in generating retained earnings or possible distributions impacting equity.
- Invested capital
- Invested capital showed an overall upward trend despite some year-to-year fluctuations. It increased from roughly $18.9 billion in 2019 to a peak of $21.2 billion in 2020. After declining to around $19.7 billion in 2021 and remaining stable in 2022, it increased again to $20.4 billion in 2023. This suggests continued investment activity with some variability, reflecting both changes in debt and equity components.
In summary, the company experienced fluctuating leverage with debt levels rising and falling over the five years. Equity showed a downward trend after 2020, which may warrant further analysis regarding profitability or capital management. Invested capital reflected active capital deployment with an overall growth trend despite intermediate declines. The interactions among these metrics suggest ongoing adjustments in the company's capital structure over the period.
Cost of Capital
Corning Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Convertible preferred stock, Series A, par value $100 per share (book value) | ÷ | = | × | = | |||||||||
| Long-term debt and short-term borrowings3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and short-term borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Convertible preferred stock, Series A, par value $100 per share (book value) | ÷ | = | × | = | |||||||||
| Long-term debt and short-term borrowings3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and short-term borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Convertible preferred stock, Series A, par value $100 per share (book value) | ÷ | = | × | = | |||||||||
| Long-term debt and short-term borrowings3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and short-term borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Convertible preferred stock, Series A, par value $100 per share (book value) | ÷ | = | × | = | |||||||||
| Long-term debt and short-term borrowings3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and short-term borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Convertible preferred stock, Series A, par value $100 per share (book value) | ÷ | = | × | = | |||||||||
| Long-term debt and short-term borrowings3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2019-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and short-term borrowings. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Corning Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
Analysis of the financial data reveals several notable trends over the five-year period from 2019 to 2023.
- Economic Profit
- The economic profit shows a consistent negative value throughout the entire period, indicating a persistent economic loss. The loss decreased from -$1,190 million in 2019 to a low of -$490 million in 2021, suggesting an improvement in performance during this timeframe. However, from 2021 onward, the economic loss worsened significantly, increasing to -$1,064 million in 2022 and further to -$1,796 million in 2023, indicating a deterioration in profitability.
- Invested Capital
- Invested capital fluctuated over the years, starting at $18,872 million in 2019 and rising significantly to $21,233 million in 2020. It then declined slightly to $19,716 million in 2021 and stabilized around $19,666 million in 2022, before a moderate increase to $20,411 million in 2023. These movements suggest changes in the company's asset base or capital allocation strategies, with a peak in 2020 followed by a slight contraction and later moderate growth.
- Economic Spread Ratio
- The economic spread ratio remained negative throughout the period, indicating that the returns on invested capital were below the cost of capital. The ratio improved from -6.3% in 2019 to -2.49% in 2021, reflecting better capital efficiency and profitability for these years. Nevertheless, the ratio declined again, becoming more negative at -5.41% in 2022 and steepening further to -8.8% in 2023, which aligns with the increasing economic losses observed in these years.
Overall, the data indicates a period of moderate improvement in economic profitability and capital efficiency up to 2021, followed by a notable decline through 2022 and 2023. This deterioration is evidenced by increasing economic losses and a worsening economic spread ratio despite relatively stable invested capital levels. The trends suggest challenges in generating adequate returns on capital in the most recent years.
Economic Profit Margin
Corning Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Net sales | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted net sales | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Apple Inc. | ||||||
| Arista Networks Inc. | ||||||
| Cisco Systems Inc. | ||||||
| Dell Technologies Inc. | ||||||
| Super Micro Computer Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Economic profit. See details »
2 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The analysis of the provided financial data reveals notable trends in economic profit, adjusted net sales, and economic profit margin over the five-year period ending December 31, 2023.
- Economic Profit
- The economic profit shows a fluctuating yet overall declining trend. In 2019, the economic profit was negative at -1,190 million US dollars, improving in 2020 and 2021 to -762 million and -490 million respectively, indicating a reduction in losses. However, the trend reversed starting in 2022, with economic profit worsening to -1,064 million, and further declining sharply to -1,796 million by the end of 2023. The data suggests that while there was some improvement in economic profitability in the early years, the company faced increasing economic profit losses in the last two years measured.
- Adjusted Net Sales
- Adjusted net sales generally increased from 2019 through 2022, starting at 11,503 million US dollars and rising steadily to reach a peak of 14,146 million by the end of 2022. However, this upward trajectory did not sustain into 2023, as net sales decreased significantly to 12,579 million. This decline could be indicative of market challenges or shifts in demand affecting sales towards the end of the timeline.
- Economic Profit Margin
- The economic profit margin, expressed as a percentage, mirrors the trend observed in the economic profit figures. Starting at -10.34% in 2019, the margin improved to -6.18% in 2020 and further to -3.51% in 2021, reflecting a shrinking loss margin. Despite this initial improvement, the margin deteriorated to -7.52% in 2022 and worsened substantially to -14.28% in 2023. This indicates that economic profitability as a percentage of sales declined significantly after 2021, aligning with the worsening economic profit and the drop in adjusted net sales.
Overall, the data exhibit a pattern of early recovery from economic losses up to 2021, followed by a marked deterioration in both profitability and sales in the subsequent two years. The sharp decline in economic profit and economic profit margin in 2023, together with the reduced adjusted net sales, suggests potential operational or market challenges impacting financial performance.