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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

DuPont de Nemours Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Net operating profit after taxes (NOPAT)¹	(572)	4,932)	2,498)	3,846)	8,206)
Cost of capital²	18.60%	14.14%	16.51%	14.51%	13.36%
Invested capital³	62,770)	153,164)	149,192)	50,610)	46,288)

Economic profit⁴	(12,245)	(16,721)	(22,132)	(3,497)	2,022)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -572 – 18.60% × 62,770 = -12,245

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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.	DuPont de Nemours Inc. economic profit increased from 2017 to 2018 and from 2018 to 2019.

DuPont de Nemours Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Net income attributable to DuPont	498)	3,844)	1,460)	4,318)	7,685)
Deferred income tax expense (benefit)¹	(478)	(434)	(2,166)	(1,259)	305)
Increase (decrease) in allowance for doubtful receivables²	(1)	64)	17)	16)	(16)
Increase (decrease) in LIFO reserve³	—)	118)	(269)	45)	(561)
Increase (decrease) in deferred revenue⁴	—)	(41)	2,332)	—)	—)
Increase (decrease) in restructuring reserve⁵	20)	96)	307)	128)	108)
Increase (decrease) in equity equivalents⁶	(459)	(197)	221)	(1,070)	(164)
Interest expense	668)	1,504)	1,082)	858)	946)
Interest expense, operating lease liability⁷	23)	121)	110)	92)	110)
Adjusted interest expense	691)	1,625)	1,192)	950)	1,056)
Tax benefit of interest expense⁸	(145)	(341)	(417)	(333)	(370)
Adjusted interest expense, after taxes⁹	546)	1,283)	775)	618)	687)
(Gain) loss on marketable securities	(1)	9)	(110)	(56)	(82)
Interest income	(55)	(210)	(147)	(107)	(71)
Investment income, before taxes	(56)	(201)	(257)	(163)	(153)
Tax expense (benefit) of investment income¹⁰	12)	42)	90)	57)	54)
Investment income, after taxes¹¹	(44)	(159)	(167)	(106)	(99)
(Income) loss from discontinued operations, net of tax¹²	(1,214)	5)	77)	—)	—)
Net income (loss) attributable to noncontrolling interest	102)	155)	132)	86)	98)
Net operating profit after taxes (NOPAT)	(572)	4,932)	2,498)	3,846)	8,206)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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 deferred revenue.

⁵ Addition of increase (decrease) in restructuring reserve.

⁶ Addition of increase (decrease) in equity equivalents to net income attributable to DuPont.

⁷ 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 554 × 4.07% = 23

⁸ 2019 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 691 × 21.00% = 145

⁹ Addition of after taxes interest expense to net income attributable to DuPont.

¹⁰ 2019 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 56 × 21.00% = 12

¹¹ Elimination of after taxes investment income.

¹² Elimination of discontinued operations.

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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.	DuPont de Nemours Inc. NOPAT increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

DuPont de Nemours Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Provision for (benefit from) income taxes on continuing operations	140)	1,489)	(476)	9)	2,147)
Less: Deferred income tax expense (benefit)	(478)	(434)	(2,166)	(1,259)	305)
Add: Tax savings from interest expense	145)	341)	417)	333)	370)
Less: Tax imposed on investment income	12)	42)	90)	57)	54)
Cash operating taxes	751)	2,222)	2,017)	1,544)	2,158)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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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.	DuPont de Nemours Inc. cash operating taxes increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

DuPont de Nemours Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Short-term borrowings and finance lease obligations	3,830)	2,802)	4,015)	907)	995)
Long-term debt, excluding debt within one year	13,617)	37,662)	30,056)	20,456)	16,215)
Operating lease liability¹	554)	2,777)	2,836)	1,967)	2,040)
Total reported debt & leases	18,001)	43,241)	36,907)	23,330)	19,250)
Total DuPont stockholders’ equity	40,987)	94,571)	100,330)	25,987)	25,374)
Net deferred tax (assets) liabilities²	3,278)	3,711)	4,397)	(2,156)	(1,846)
Allowance for doubtful receivables³	9)	191)	127)	110)	94)
LIFO reserve⁴	—)	(98)	(216)	53)	8)
Deferred revenue⁵	—)	2,565)	2,606)	—)	—)
Restructuring reserve⁶	162)	684)	588)	281)	153)
Equity equivalents⁷	3,449)	7,053)	7,502)	(1,712)	(1,591)
Accumulated other comprehensive (income) loss, net of tax⁸	1,416)	12,394)	8,972)	9,822)	8,667)
Non-redeemable noncontrolling interests	569)	1,608)	1,597)	1,242)	809)
Adjusted total DuPont stockholders’ equity	46,421)	115,626)	118,401)	35,339)	33,259)
Construction in progress⁹	(1,652)	(3,870)	(4,600)	(6,100)	(4,355)
Marketable securities¹⁰	—)	(1,833)	(1,516)	(1,959)	(1,866)
Invested capital	62,770)	153,164)	149,192)	50,610)	46,288)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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 LIFO reserve. See details »

⁵ Addition of deferred revenue.

⁶ Addition of restructuring reserve.

⁷ Addition of equity equivalents to total DuPont stockholders’ equity.

⁸ Removal of accumulated other comprehensive income.

⁹ Subtraction of construction in progress.

¹⁰ Subtraction of marketable securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	DuPont de Nemours Inc. invested capital increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

DuPont de Nemours Inc., cost of capital calculations

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	39,262)	39,262)	÷	58,866)	=	0.67	0.67	×	26.28%	=	17.53%
Preferred stock, series A, $1.00 par (book value)	—)	—)	÷	58,866)	=	0.00	0.00	×	0.00%	=	0.00%
Short-term borrowings and long-term debt³	19,050)	19,050)	÷	58,866)	=	0.32	0.32	×	4.07% × (1 – 21.00%)	=	1.04%
Operating lease liability⁴	554)	554)	÷	58,866)	=	0.01	0.01	×	4.07% × (1 – 21.00%)	=	0.03%
Total:	58,866)					1.00					18.60%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term borrowings and long-term debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	39,083)	39,083)	÷	83,391)	=	0.47	0.47	×	26.28%	=	12.32%
Preferred stock, series A, $1.00 par (book value)	—)	—)	÷	83,391)	=	0.00	0.00	×	0.00%	=	0.00%
Short-term borrowings and long-term debt³	41,531)	41,531)	÷	83,391)	=	0.50	0.50	×	4.34% × (1 – 21.00%)	=	1.71%
Operating lease liability⁴	2,777)	2,777)	÷	83,391)	=	0.03	0.03	×	4.34% × (1 – 21.00%)	=	0.11%
Total:	83,391)					1.00					14.14%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term borrowings and long-term debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	55,780)	55,780)	÷	94,739)	=	0.59	0.59	×	26.28%	=	15.47%
Preferred stock, series A, $1.00 par (book value)	—)	—)	÷	94,739)	=	0.00	0.00	×	0.00%	=	0.00%
Short-term borrowings and long-term debt³	36,123)	36,123)	÷	94,739)	=	0.38	0.38	×	3.88% × (1 – 35.00%)	=	0.96%
Operating lease liability⁴	2,836)	2,836)	÷	94,739)	=	0.03	0.03	×	3.88% × (1 – 35.00%)	=	0.08%
Total:	94,739)					1.00					16.51%

Based on: 10-K (reporting date: 2017-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term borrowings and long-term debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2016

	Capital (fair value)¹	Weights					Cost of capital
Equity²	24,371)	24,371)	÷	49,418)	=	0.49	0.49	×	26.28%	=	12.96%
Preferred stock, series A, $1.00 par (book value)	—)	—)	÷	49,418)	=	0.00	0.00	×	8.50%	=	0.00%
Short-term borrowings and long-term debt³	23,079)	23,079)	÷	49,418)	=	0.47	0.47	×	4.70% × (1 – 35.00%)	=	1.43%
Operating lease liability⁴	1,967)	1,967)	÷	49,418)	=	0.04	0.04	×	4.70% × (1 – 35.00%)	=	0.12%
Total:	49,418)					1.00					14.51%

Based on: 10-K (reporting date: 2016-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term borrowings and long-term debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2015

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,133)	17,133)	÷	41,627)	=	0.41	0.41	×	26.28%	=	10.82%
Preferred stock, series A, $1.00 par (book value)	4,000)	4,000)	÷	41,627)	=	0.10	0.10	×	8.50%	=	0.82%
Short-term borrowings and long-term debt³	18,454)	18,454)	÷	41,627)	=	0.44	0.44	×	5.40% × (1 – 35.00%)	=	1.56%
Operating lease liability⁴	2,040)	2,040)	÷	41,627)	=	0.05	0.05	×	5.40% × (1 – 35.00%)	=	0.17%
Total:	41,627)					1.00					13.36%

Based on: 10-K (reporting date: 2015-12-31).

¹ US$ in millions

² Equity. See details »

³ Short-term borrowings and long-term debt. See details »

⁴ Operating lease liability. See details »

DuPont de Nemours Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in millions)
Economic profit¹	(12,245)	(16,721)	(22,132)	(3,497)	2,022)
Invested capital²	62,770)	153,164)	149,192)	50,610)	46,288)
Performance Ratio
Economic spread ratio³	-19.51%	-10.92%	-14.83%	-6.91%	4.37%
Benchmarks
Economic Spread Ratio, Competitors⁴
Linde plc	-8.31%	—	—	—	—

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2019 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -12,245 ÷ 62,770 = -19.51%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	DuPont de Nemours Inc. economic spread ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

DuPont de Nemours Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Selected Financial Data (US$ in millions)
Economic profit¹	(12,245)	(16,721)	(22,132)	(3,497)	2,022)

Net sales	21,512)	85,977)	62,484)	48,158)	48,778)
Add: Increase (decrease) in deferred revenue	—)	(41)	2,332)	—)	—)
Adjusted net sales	21,512)	85,936)	64,816)	48,158)	48,778)
Performance Ratio
Economic profit margin²	-56.92%	-19.46%	-34.15%	-7.26%	4.15%
Benchmarks
Economic Profit Margin, Competitors³
Linde plc	-23.11%	—	—	—	—

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

¹ Economic profit. See details »

² 2019 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -12,245 ÷ 21,512 = -56.92%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company 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.	DuPont de Nemours Inc. economic profit margin improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

DuPont de Nemours Inc. (NYSE:DD)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin