Paying users zone. Data is covered by .

  • Get to DowDuPont Inc. for $19.99, or

  • get to whole website for at least 3 months from $49.99.

 

$19.99

Economic Value Added (EVA)

Difficulty: Advanced

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

DowDuPont Inc., economic profit calculation

USD $ in millions

 
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net operating profit after taxes (NOPAT)1
Cost of capital2 % % % % %
Invested capital3
Economic profit4

Source: Based on data from DowDuPont Inc. Annual Reports

2017 Calculations

1 NOPAT. See Details »

2 Cost of capital. See Details »

3 Invested capital. See Details »

4 Economic profit = NOPAT – Cost of capital × Invested capital
= % × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. DowDuPont Inc.'s economic profit declined from 2015 to 2016 and from 2016 to 2017.

Top


Net Operating Profit after Taxes (NOPAT)

DowDuPont Inc., NOPAT calculation

USD $ in millions

 
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income attributable to DowDuPont Inc.
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for doubtful receivables2
Increase (decrease) in LIFO reserve3
Increase (decrease) in restructuring reserve4
Increase (decrease) in equity equivalents5
Interest expense and amortization of debt discount
Interest expense, operating lease obligations6
Adjusted interest expense and amortization of debt discount
Tax benefit of interest expense and amortization of debt discount7
Adjusted interest expense and amortization of debt discount, after taxes8
(Gain) loss on marketable securities
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income9
Investment income, after taxes10
(Income) loss from discontinued operations, net of tax11
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Source: Based on data from DowDuPont Inc. Annual Reports

2017 Calculations

1 Elimination of deferred tax expense. See Details »

2 Addition of increase (decrease) in allowance for doubtful receivables.

3 Addition of increase (decrease) in LIFO reserve. See Details »

4 Addition of increase (decrease) in restructuring reserve.

5 Addition of increase (decrease) in equity equivalents to net income attributable to DowDuPont Inc..

6 Addition of interest expense on capitalized operating leases. See Details »

7 Tax benefit of interest expense and amortization of debt discount = Adjusted interest expense and amortization of debt discount × Statutory income tax rate
= × 35% =

8 Addition of after taxes interest expense to net income attributable to DowDuPont Inc..

9 Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 35% =

10 Elimination of after taxes investment income.

11 Elimination of discontinued operations.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. DowDuPont Inc.'s NOPAT declined from 2015 to 2016 and from 2016 to 2017.

Top


Cash Operating Taxes

DowDuPont Inc., cash operating taxes calculation

USD $ in millions

 
12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Provision (credit) for income taxes on continuing operations
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest expense and amortization of debt discount
Less: Tax imposed on investment income
Cash operating taxes

Source: Based on data from DowDuPont Inc. Annual Reports

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. DowDuPont Inc.'s cash operating taxes declined from 2015 to 2016 but then increased from 2016 to 2017 not reaching 2015 level.

Top


Invested Capital

DowDuPont Inc., invested capital calculation (financing approach)

USD $ in millions

 
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Notes payable
Long-term debt due within one year
Long-term debt, excluding debt due within one year
PV of operating lease payments1
Total reported debt & leases
DowDuPont's stockholders' equity
Net deferred tax (assets) liabilities2
Allowance for doubtful receivables3
LIFO reserve4
Restructuring reserve5
Equity equivalents6
Accumulated other comprehensive (income) loss, net of tax7
Redeemable noncontrolling interest
Non-redeemable noncontrolling interests
Adjusted dowDuPont's stockholders' equity
Construction in progress8
Marketable securities9
Invested capital

Source: Based on data from DowDuPont Inc. Annual Reports

1 Addition of capitalized operating leases. See Details »

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 restructuring reserve.

6 Addition of equity equivalents to dowDuPont's stockholders' equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of construction in progress.

9 Subtraction of marketable securities.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. DowDuPont Inc.'s invested capital increased from 2015 to 2016 and from 2016 to 2017.

Top


Cost of Capital

DowDuPont Inc., cost of capital calculations

Fair Value1 Weights Cost of Capital
Equity2 ÷ = × % = %
Preferred stock, series A, $1.00 par (book value) ÷ = × % = %
Debt3 ÷ = × % × (1 – 35%) = %
PV of operating lease payments4 ÷ = × % × (1 – 35%) = %
Total: %

Source: Based on data from DowDuPont Inc. Annual Reports

1 USD $ in millions

2 Equity. See Details »

3 Debt. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 ÷ = × % = %
Preferred stock, series A, $1.00 par (book value) ÷ = × % = %
Debt3 ÷ = × % × (1 – 35%) = %
PV of operating lease payments4 ÷ = × % × (1 – 35%) = %
Total: %

Source: Based on data from DowDuPont Inc. Annual Reports

1 USD $ in millions

2 Equity. See Details »

3 Debt. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 ÷ = × % = %
Preferred stock, series A, $1.00 par (book value) ÷ = × % = %
Debt3 ÷ = × % × (1 – 35%) = %
PV of operating lease payments4 ÷ = × % × (1 – 35%) = %
Total: %

Source: Based on data from DowDuPont Inc. Annual Reports

1 USD $ in millions

2 Equity. See Details »

3 Debt. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 ÷ = × % = %
Preferred stock, series A, $1.00 par (book value) ÷ = × % = %
Debt3 ÷ = × % × (1 – 35%) = %
PV of operating lease payments4 ÷ = × % × (1 – 35%) = %
Total: %

Source: Based on data from DowDuPont Inc. Annual Reports

1 USD $ in millions

2 Equity. See Details »

3 Debt. See Details »

4 PV of operating lease payments. See Details »

Fair Value1 Weights Cost of Capital
Equity2 ÷ = × % = %
Preferred stock, series A, $1.00 par (book value) ÷ = × % = %
Debt3 ÷ = × % × (1 – 35%) = %
PV of operating lease payments4 ÷ = × % × (1 – 35%) = %
Total: %

Source: Based on data from DowDuPont Inc. Annual Reports

1 USD $ in millions

2 Equity. See Details »

3 Debt. See Details »

4 PV of operating lease payments. See Details »

Top


Economic Spread

DowDuPont Inc., economic spread calculation

 
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Economic profit1
Invested capital2
Ratio
Economic spread3 % % % % %

Source: Based on data from DowDuPont Inc. Annual Reports

2017 Calculations

1 Economic profit. See Details »

2 Invested capital. See Details »

3 Economic spread = 100 × Economic profit ÷ Invested capital
= 100 × ÷ = %

Ratio Description The company
Economic spread The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. DowDuPont Inc.'s economic spread deteriorated from 2015 to 2016 and from 2016 to 2017.

Top


Economic Profit Margin

DowDuPont Inc., economic profit margin calculation

 
Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Selected Financial Data (USD $ in millions)
Economic profit1
Net sales
Ratio
Economic profit margin2 % % % % %

Source: Based on data from DowDuPont Inc. Annual Reports

2017 Calculations

1 Economic profit. See Details »

2 Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × ÷ = %

Ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company's profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. DowDuPont Inc.'s economic profit margin deteriorated from 2015 to 2016 and from 2016 to 2017.

Top