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

Elevance Health 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	6,533)	6,800)	7,128)	4,926)	5,412)
Cost of capital²	10.20%	10.20%	9.89%	9.42%	9.66%
Invested capital³	69,868)	66,885)	63,998)	56,821)	55,501)

Economic profit⁴	(596)	(21)	796)	(426)	49)

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
= 6,533 – 10.20% × 69,868 = -596

Download chart

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.	Elevance Health Inc. economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Elevance Health Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Shareholders’ net income	5,987)	6,025)	6,104)	4,572)	4,807)
Deferred income tax expense (benefit)¹	(690)	4)	180)	(526)	75)
Increase (decrease) in allowance for doubtful accounts²	276)	124)	266)	49)	(80)
Increase (decrease) in liabilities for employee termination costs³	118)	(41)	(65)	187)	—)
Increase (decrease) in equity equivalents⁴	(296)	87)	381)	(290)	(5)
Interest expenses	1,030)	851)	798)	784)	746)
Interest expense, operating lease liability⁵	31)	28)	27)	31)	26)
Adjusted interest expenses	1,061)	879)	825)	815)	772)
Tax benefit of interest expenses⁶	(223)	(185)	(173)	(171)	(162)
Adjusted interest expenses, after taxes⁷	838)	694)	652)	644)	610)
Net income (loss) attributable to noncontrolling interest	4)	(6)	(9)	—)	—)
Net operating profit after taxes (NOPAT)	6,533)	6,800)	7,128)	4,926)	5,412)

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 allowance for doubtful accounts.

³ Addition of increase (decrease) in liabilities for employee termination costs.

⁴ Addition of increase (decrease) in equity equivalents to shareholders’ net income.

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 849 × 3.66% = 31

⁶ 2023 Calculation
Tax benefit of interest expenses = Adjusted interest expenses × Statutory income tax rate
= 1,061 × 21.00% = 223

⁷ Addition of after taxes interest expense to shareholders’ net income.

Download chart

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.	Elevance Health Inc. NOPAT decreased from 2021 to 2022 and from 2022 to 2023.

Elevance Health Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense	1,724)	1,750)	1,830)	1,666)	1,178)
Less: Deferred income tax expense (benefit)	(690)	4)	180)	(526)	75)
Add: Tax savings from interest expenses	223)	185)	173)	171)	162)
Cash operating taxes	2,637)	1,931)	1,823)	2,363)	1,265)

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).

Download chart

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.	Elevance Health Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Elevance Health Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Short-term borrowings	225)	265)	275)	—)	700)
Current portion of long-term debt	1,649)	1,500)	1,599)	700)	1,598)
Long-term debt, less current portion	23,246)	22,349)	21,157)	19,335)	17,787)
Operating lease liability¹	849)	932)	997)	957)	640)
Total reported debt & leases	25,969)	25,046)	24,028)	20,992)	20,725)
Shareholders’ equity	39,306)	36,307)	36,060)	33,199)	31,728)
Net deferred tax (assets) liabilities²	1,742)	1,897)	2,702)	2,019)	2,227)
Allowance for doubtful accounts³	1,240)	964)	840)	574)	525)
Liabilities for employee termination costs⁴	199)	81)	122)	187)	—)
Equity equivalents⁵	3,181)	2,942)	3,664)	2,780)	2,752)
Accumulated other comprehensive (income) loss, net of tax⁶	1,313)	2,503)	178)	(150)	296)
Noncontrolling interests	99)	87)	68)	—)	—)
Adjusted shareholders’ equity	43,899)	41,839)	39,970)	35,829)	34,776)
Invested capital	69,868)	66,885)	63,998)	56,821)	55,501)

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 liabilities for employee termination costs.

⁵ Addition of equity equivalents to shareholders’ equity.

⁶ Removal of accumulated other comprehensive income.

Download chart

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Elevance Health Inc. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Elevance Health Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	118,517)	118,517)	÷	143,160)	=	0.83	0.83	×	11.66%	=	9.65%
Debt³	23,794)	23,794)	÷	143,160)	=	0.17	0.17	×	4.05% × (1 – 21.00%)	=	0.53%
Operating lease liability⁴	849)	849)	÷	143,160)	=	0.01	0.01	×	3.66% × (1 – 21.00%)	=	0.02%
Total:	143,160)					1.00					10.20%

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 »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	115,673)	115,673)	÷	139,194)	=	0.83	0.83	×	11.66%	=	9.69%
Debt³	22,589)	22,589)	÷	139,194)	=	0.16	0.16	×	3.83% × (1 – 21.00%)	=	0.49%
Operating lease liability⁴	932)	932)	÷	139,194)	=	0.01	0.01	×	2.98% × (1 – 21.00%)	=	0.02%
Total:	139,194)					1.00					10.20%

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 »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	110,657)	110,657)	÷	138,066)	=	0.80	0.80	×	11.66%	=	9.35%
Debt³	26,412)	26,412)	÷	138,066)	=	0.19	0.19	×	3.51% × (1 – 21.00%)	=	0.53%
Operating lease liability⁴	997)	997)	÷	138,066)	=	0.01	0.01	×	2.69% × (1 – 21.00%)	=	0.02%
Total:	138,066)					1.00					9.89%

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 »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	72,573)	72,573)	÷	97,799)	=	0.74	0.74	×	11.66%	=	8.65%
Debt³	24,269)	24,269)	÷	97,799)	=	0.25	0.25	×	3.77% × (1 – 21.00%)	=	0.74%
Operating lease liability⁴	957)	957)	÷	97,799)	=	0.01	0.01	×	3.21% × (1 – 21.00%)	=	0.02%
Total:	97,799)					1.00					9.42%

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 »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	76,723)	76,723)	÷	99,837)	=	0.77	0.77	×	11.66%	=	8.96%
Debt³	22,474)	22,474)	÷	99,837)	=	0.23	0.23	×	3.82% × (1 – 21.00%)	=	0.68%
Operating lease liability⁴	640)	640)	÷	99,837)	=	0.01	0.01	×	4.09% × (1 – 21.00%)	=	0.02%
Total:	99,837)					1.00					9.66%

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

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Elevance Health 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	(596)	(21)	796)	(426)	49)
Invested capital²	69,868)	66,885)	63,998)	56,821)	55,501)
Performance Ratio
Economic spread ratio³	-0.85%	-0.03%	1.24%	-0.75%	0.09%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	-1.82%	0.39%	0.83%	-2.44%	-3.76%
Cigna Group	-2.20%	0.83%	-0.16%	2.73%	-0.48%
CVS Health Corp.	0.49%	-3.95%	0.02%	0.46%	-0.32%
Danaher Corp.	-7.53%	-2.58%	-1.94%	-3.34%	-6.74%
Humana Inc.	1.18%	2.41%	2.74%	9.61%	7.75%
Intuitive Surgical Inc.	5.74%	5.46%	21.07%	9.06%	25.74%
Medtronic PLC	-3.66%	-2.43%	-4.02%	-3.15%	-2.06%
UnitedHealth Group Inc.	5.76%	4.80%	4.66%	5.23%	5.25%

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 × -596 ÷ 69,868 = -0.85%

⁴ Click competitor name to see calculations.

Download chart

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.	Elevance Health Inc. economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Elevance Health 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	(596)	(21)	796)	(426)	49)
Operating revenue	170,209)	155,660)	136,943)	120,808)	103,141)
Performance Ratio
Economic profit margin²	-0.35%	-0.01%	0.58%	-0.35%	0.05%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	-2.71%	0.54%	1.20%	-4.25%	-6.85%
Cigna Group	-0.97%	0.40%	-0.08%	1.61%	-0.29%
CVS Health Corp.	0.18%	-1.52%	0.01%	0.24%	-0.17%
Danaher Corp.	-24.73%	-6.42%	-4.84%	-9.78%	-21.86%
Humana Inc.	0.34%	0.76%	1.01%	2.76%	2.27%
Intuitive Surgical Inc.	5.73%	4.72%	16.58%	9.29%	19.07%
Medtronic PLC	-8.26%	-5.33%	-9.63%	-7.76%	-4.89%
UnitedHealth Group Inc.	2.86%	2.46%	2.29%	2.67%	2.56%

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 ÷ Operating revenue
= 100 × -596 ÷ 170,209 = -0.35%

³ Click competitor name to see calculations.

Download chart

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.	Elevance Health Inc. economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.

Elevance Health Inc. (NYSE:ELV)

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