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
Corning Inc. 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 Corning Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Corning Inc., economic profit calculation
US$ 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
= – × =
The period under review demonstrates a fluctuating financial performance as measured by economic profit. Net operating profit after taxes (NOPAT) initially increased significantly before declining, while the cost of capital generally rose and then stabilized. Invested capital exhibited an overall increase, though with some yearly variation. Consequently, economic profit remained negative throughout the analyzed timeframe, and the magnitude of the loss increased in later years.
- NOPAT Trend
- NOPAT experienced substantial growth from 2019 to 2021, increasing from US$968 million to US$2,088 million. However, a marked decline occurred in 2022, falling to US$1,544 million, and continued downward in 2023 to US$817 million. This suggests a weakening in operational profitability in the latter part of the period.
- Cost of Capital Trend
- The cost of capital generally increased from 13.19% in 2019 to 15.44% in 2022. It then decreased slightly to 14.87% in 2023. This indicates a rising cost of funding the company’s operations, potentially due to changes in market interest rates or perceived risk, followed by a modest reduction.
- Invested Capital Trend
- Invested capital increased from US$18,872 million in 2019 to US$21,233 million in 2020. It then decreased to US$19,716 million in 2021 before stabilizing around US$19,666 million in 2022 and increasing again to US$20,411 million in 2023. This suggests periods of capital investment followed by potential divestitures or depreciation, and then renewed investment.
- Economic Profit Trend
- Economic profit remained negative throughout the entire period. The losses were initially around US$1,522 million in 2019 and US$1,158 million in 2020, then decreased to US$911 million in 2021. However, the losses widened again in 2022 to US$1,492 million and further increased to US$2,218 million in 2023. This indicates that the company’s returns on invested capital were consistently below its cost of capital, and the gap widened in the most recent year.
The combined effect of declining NOPAT and a relatively high cost of capital contributed to the increasing negative economic profit in the later years of the period. While invested capital fluctuated, it did not offset the negative impact of lower profitability and higher funding costs.
Net Operating Profit after Taxes (NOPAT)
Corning Inc., NOPAT calculation
US$ 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.
The economic spread ratio exhibited a consistent decline over the five-year period. Economic profit remained negative throughout the observed timeframe, while invested capital fluctuated. The relationship between these two metrics resulted in a progressively worsening economic spread ratio.
- Economic Spread Ratio
- The economic spread ratio decreased from -8.07% in 2019 to -10.87% in 2023. This indicates a widening gap between the company’s return on invested capital and its cost of capital. The most significant single-year decrease occurred between 2022 and 2023, moving from -7.59% to -10.87%.
- Economic Profit
- Economic profit consistently registered as a negative value across all years. While the deficit lessened from 2019 to 2021, it increased substantially in both 2022 and 2023, reaching -2,218 US$ million in 2023. This suggests the company’s operations are not generating returns exceeding the cost of capital.
- Invested Capital
- Invested capital increased from 18,872 US$ million in 2019 to 21,233 US$ million in 2020, before decreasing to 19,716 US$ million in 2021. It remained relatively stable between 2021 and 2022, and then increased to 20,411 US$ million in 2023. The fluctuations in invested capital do not appear to correlate directly with the worsening economic spread ratio, as the ratio deteriorated even during periods of decreasing invested capital.
The combined effect of consistently negative economic profit and a declining economic spread ratio suggests a weakening financial performance relative to the capital employed. The increasing magnitude of the negative economic profit, particularly in the most recent two years, is a concerning trend.
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 economic profit margin exhibited a generally worsening trend over the five-year period. While fluctuations occurred, the metric consistently remained negative, indicating the company did not generate returns exceeding its cost of capital during these years.
- Economic Profit
- Economic profit demonstrated variability, but consistently remained negative. The magnitude of the loss increased from US$1,522 million in 2019 to US$2,218 million in 2023. A slight improvement was observed between 2019 and 2021, followed by a renewed decline in subsequent years.
- Adjusted Net Sales
- Adjusted net sales generally increased from 2019 to 2021, peaking at US$13,970 million. A slight increase occurred in 2022, but sales decreased significantly in 2023, falling to US$12,579 million. This decrease in sales in the most recent year coincides with the largest economic loss.
- Economic Profit Margin
- The economic profit margin began at -13.23% in 2019 and improved to -6.52% in 2021. However, the margin deteriorated sharply in 2022 to -10.55% and reached -17.64% in 2023. This indicates a growing disparity between the company’s operating profits and its cost of capital, particularly in the latest year. The decline in the margin in 2023 is substantially larger than the increase in the economic profit loss, suggesting a significant shift in profitability relative to capital employed.
The combined trends suggest that while the company experienced some sales growth initially, it has not been sufficient to generate economic profits. The substantial decline in both economic profit and economic profit margin in 2023 warrants further investigation to determine the underlying causes and potential corrective actions.