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.
Economic Profit
FedEx Corp., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 4,913 – 11.31% × 70,379 = -3,046
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibited substantial growth from 2020 to 2021, increasing from 2,531 million to 7,163 million US dollars. However, this was followed by a decline in 2022 to 5,014 million US dollars. Subsequent periods show moderate fluctuations, with slight recovery in 2023 to 5,421 million, then a decrease to 4,954 million in 2024, and a minor drop to 4,913 million in 2025. Overall, NOPAT experiences volatility with a peak in 2021 and a downward trend in the later years.
- Cost of Capital
- The cost of capital presents an increasing trend from 10.23% in 2020 to a high of 12.28% in 2024. There is a slight decrease to 11.31% in 2025. The general rise over the years points to increasing capital costs, which could influence investment decisions and returns.
- Invested Capital
- Invested capital shows steady growth throughout the period reviewed, starting at 57,553 million US dollars in 2020 and rising consistently each year to reach 70,379 million in 2025. This indicates ongoing investment or asset growth within the company.
- Economic Profit
- Economic profit remains negative across all years, indicating that returns have not covered the cost of capital. The loss narrows from -3,355 million in 2020 to -567 million in 2021, suggesting improved efficiency. However, it worsens in the following years, reaching as low as -3,678 million in 2024 before slightly improving to -3,046 million in 2025. The persistent negative economic profit highlights challenges in achieving value creation relative to the cost of invested capital.
- Summary
- Overall, the data reflects a company experiencing fluctuations in operating profitability, rising capital costs, and increasing investment levels. Despite substantial NOPAT growth in 2021, later years show decline or stagnation. The steady increase in invested capital did not translate into positive economic profit, which remained negative throughout the period. The combination of rising cost of capital and negative economic profit suggests the need for a review of capital allocation efficiency to enhance shareholder value.
Net Operating Profit after Taxes (NOPAT)
FedEx Corp., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in equity equivalents to net income.
4 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 16,837 × 3.98% = 670
5 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,459 × 21.00% = 306
6 Addition of after taxes interest expense to net income.
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 363 × 21.00% = 76
8 Elimination of after taxes investment income.
- Net Income
- The net income exhibits a significant increase from 2020 to 2021, rising from 1,286 million US dollars to 5,231 million US dollars. Following this peak, there is a decline in 2022 to 3,826 million US dollars. The values then show a modest upward movement in 2023 and 2024, reaching 4,331 million US dollars, before dipping slightly to 4,092 million US dollars in 2025. This pattern suggests a period of volatility with an initial strong recovery followed by a stabilization phase with minor fluctuations.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT follows a somewhat parallel trend to net income but with less volatility. It increases notably from 2,531 million US dollars in 2020 to a peak of 7,163 million US dollars in 2021. A decline is observed in 2022 to 5,014 million US dollars, after which it gradually decreases to 4,913 million US dollars by 2025. The downward trend in the last few years indicates some pressure on the core operating profitability despite the initial strong gain.
Cash Operating Taxes
FedEx Corp., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
- Provision for Income Taxes
- The provision for income taxes shows a notable increase from 383 million USD in 2020 to a peak of 1,443 million USD in 2021, representing a substantial rise. This is followed by a decrease to 1,070 million USD in 2022. Subsequently, the provision increases again to 1,391 million USD in 2023, then slightly rises to 1,505 million USD in 2024, before declining to 1,349 million USD in 2025. The trend indicates volatility with overall growth compared to the initial year, suggesting fluctuating taxable income or changes in tax planning strategies over the period.
- Cash Operating Taxes
- Cash operating taxes have generally trended upward over the six-year period. Starting at 259 million USD in 2020, the figures increase sharply to 893 million USD in 2021 and continue to rise to 983 million USD in 2022. The upward trajectory continues through 2023 with 1,177 million USD and reaches the highest value of 1,885 million USD in 2024. In 2025, there is a decline to 1,626 million USD. The overall increase suggests higher actual tax payments, which might correlate with increased operating profits or altered tax compliance and payment profiles.
- Comparison and Insights
- Comparing the two items, cash operating taxes generally rise more consistently than the provision for income taxes, which shows more fluctuations. The significant jump in cash taxes from 2023 to 2024, contrasting with a steady rise in provision in the same period, might indicate timing differences or changes in tax payment schedules. The decline in both provision and cash taxes in 2025 could indicate a reduction in taxable income or enhanced tax efficiency measures.
Invested Capital
FedEx Corp., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
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 equity equivalents to common stockholders’ investment.
5 Removal of accumulated other comprehensive income.
The financial data over the six-year period presents several noteworthy trends in key capital structure metrics.
- Total reported debt & leases
- This metric shows a gradual increase from 36,121 million USD in 2020 to a peak of 38,332 million USD in 2023, followed by a slight decrease to 37,416 million USD in 2025. This pattern suggests a strategy of moderate leveraging with a plateauing effect in recent years, potentially reflecting cautious debt management or repayment activities after 2023.
- Common stockholders’ investment
- There is a consistent and significant upward trajectory in common stockholders’ equity, rising from 18,295 million USD in 2020 to 28,074 million USD in 2025. This increase indicates steady growth in the equity base, possibly driven by retained earnings accumulation or issuance of new stock, thereby strengthening the company’s capital foundation over time.
- Invested capital
- Invested capital demonstrates a steady upward trend from 57,553 million USD in 2020 to 70,379 million USD in 2025. The growth in invested capital parallels the increase in equity and debt levels, showing expansion in total capital employed by the business. The slower growth rate after 2023 suggests a stabilization in capital investment or asset base expansion.
Overall, the data indicates a balanced growth approach with incremental increases in both debt and equity financing contributing to a higher invested capital base. The stability in debt levels post-2023, combined with continuous growth in shareholders’ equity, may reflect strategic financial management aimed at optimizing capital structure and funding sustainable growth.
Cost of Capital
FedEx Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 53,250) | 53,250) | ÷ | 87,967) | = | 0.61 | 0.61 | × | 16.76% | = | 10.14% | ||
| Long-term debt, including current maturities3 | 17,880) | 17,880) | ÷ | 87,967) | = | 0.20 | 0.20 | × | 3.50% × (1 – 21.00%) | = | 0.56% | ||
| Operating lease liability4 | 16,837) | 16,837) | ÷ | 87,967) | = | 0.19 | 0.19 | × | 3.98% × (1 – 21.00%) | = | 0.60% | ||
| Total: | 87,967) | 1.00 | 11.31% | ||||||||||
Based on: 10-K (reporting date: 2025-05-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current maturities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 74,517) | 74,517) | ÷ | 109,964) | = | 0.68 | 0.68 | × | 16.76% | = | 11.36% | ||
| Long-term debt, including current maturities3 | 17,931) | 17,931) | ÷ | 109,964) | = | 0.16 | 0.16 | × | 3.50% × (1 – 21.00%) | = | 0.45% | ||
| Operating lease liability4 | 17,516) | 17,516) | ÷ | 109,964) | = | 0.16 | 0.16 | × | 3.79% × (1 – 21.00%) | = | 0.48% | ||
| Total: | 109,964) | 1.00 | 12.28% | ||||||||||
Based on: 10-K (reporting date: 2024-05-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current maturities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 63,985) | 63,985) | ÷ | 100,038) | = | 0.64 | 0.64 | × | 16.76% | = | 10.72% | ||
| Long-term debt, including current maturities3 | 18,300) | 18,300) | ÷ | 100,038) | = | 0.18 | 0.18 | × | 3.50% × (1 – 21.00%) | = | 0.51% | ||
| Operating lease liability4 | 17,753) | 17,753) | ÷ | 100,038) | = | 0.18 | 0.18 | × | 3.42% × (1 – 21.00%) | = | 0.48% | ||
| Total: | 100,038) | 1.00 | 11.70% | ||||||||||
Based on: 10-K (reporting date: 2023-05-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current maturities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 56,641) | 56,641) | ÷ | 92,839) | = | 0.61 | 0.61 | × | 16.76% | = | 10.22% | ||
| Long-term debt, including current maturities3 | 19,268) | 19,268) | ÷ | 92,839) | = | 0.21 | 0.21 | × | 3.50% × (1 – 21.00%) | = | 0.57% | ||
| Operating lease liability4 | 16,930) | 16,930) | ÷ | 92,839) | = | 0.18 | 0.18 | × | 2.85% × (1 – 21.00%) | = | 0.41% | ||
| Total: | 92,839) | 1.00 | 11.21% | ||||||||||
Based on: 10-K (reporting date: 2022-05-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current maturities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 78,820) | 78,820) | ÷ | 118,028) | = | 0.67 | 0.67 | × | 16.76% | = | 11.19% | ||
| Long-term debt, including current maturities3 | 23,625) | 23,625) | ÷ | 118,028) | = | 0.20 | 0.20 | × | 3.40% × (1 – 21.00%) | = | 0.54% | ||
| Operating lease liability4 | 15,583) | 15,583) | ÷ | 118,028) | = | 0.13 | 0.13 | × | 2.94% × (1 – 21.00%) | = | 0.31% | ||
| Total: | 118,028) | 1.00 | 12.04% | ||||||||||
Based on: 10-K (reporting date: 2021-05-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current maturities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 42,995) | 42,995) | ÷ | 80,398) | = | 0.53 | 0.53 | × | 16.76% | = | 8.96% | ||
| Long-term debt, including current maturities3 | 23,285) | 23,285) | ÷ | 80,398) | = | 0.29 | 0.29 | × | 3.60% × (1 – 21.00%) | = | 0.82% | ||
| Operating lease liability4 | 14,118) | 14,118) | ÷ | 80,398) | = | 0.18 | 0.18 | × | 3.19% × (1 – 21.00%) | = | 0.44% | ||
| Total: | 80,398) | 1.00 | 10.23% | ||||||||||
Based on: 10-K (reporting date: 2020-05-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, including current maturities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
FedEx Corp., economic spread ratio calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (3,046) | (3,678) | (2,718) | (2,436) | (567) | (3,355) | |
| Invested capital2 | 70,379) | 70,265) | 69,545) | 66,462) | 64,229) | 57,553) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -4.33% | -5.23% | -3.91% | -3.67% | -0.88% | -5.83% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Uber Technologies Inc. | — | 7.33% | -2.50% | -72.60% | -21.76% | -49.00% | |
| Union Pacific Corp. | — | -1.50% | -1.62% | 0.24% | -0.61% | -2.18% | |
| United Airlines Holdings Inc. | — | -0.94% | 1.41% | -2.78% | -9.78% | -25.33% | |
| United Parcel Service Inc. | — | 1.22% | 4.03% | 15.20% | 20.98% | -9.10% | |
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,046 ÷ 70,379 = -4.33%
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibits a consistently negative value across all periods, indicating that the company has not generated economic value beyond its cost of capital. Although there is some fluctuation, the losses remain substantial. The peak loss was recorded in May 31, 2020, with a value of -3355 million US dollars, followed by a significant reduction to -567 million in May 31, 2021. However, the economic profit deteriorated again after 2021, reaching -3678 million in May 31, 2024, before slightly improving to -3046 million in May 31, 2025.
- Invested Capital
- Invested capital shows a steadily increasing trend throughout the periods analyzed. Starting from 57,553 million US dollars in May 31, 2020, it has grown each year, reaching 70,379 million US dollars by May 31, 2025. This indicates ongoing investment and expansion of the asset base or capital employed.
- Economic Spread Ratio
- The economic spread ratio remains consistently negative, indicating that the returns on invested capital are below the cost of capital in every period. The ratio improved significantly from -5.83% in 2020 to -0.88% in 2021, suggesting a temporary enhancement in capital efficiency. However, after 2021, the ratio worsens again, fluctuating between -3.67% and -5.23% before a slight improvement to -4.33% in 2025. This pattern aligns with the trends observed in economic profit, reflecting ongoing challenges in generating adequate returns.
Economic Profit Margin
FedEx Corp., economic profit margin calculation, comparison to benchmarks
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (3,046) | (3,678) | (2,718) | (2,436) | (567) | (3,355) | |
| Revenue | 87,926) | 87,693) | 90,155) | 93,512) | 83,959) | 69,217) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -3.46% | -4.19% | -3.01% | -2.60% | -0.68% | -4.85% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Uber Technologies Inc. | — | 2.49% | -1.05% | -37.21% | -20.05% | -92.54% | |
| Union Pacific Corp. | — | -3.84% | -4.14% | 0.57% | -1.64% | -6.52% | |
| United Airlines Holdings Inc. | — | -0.81% | 1.18% | -2.53% | -20.60% | -73.27% | |
| United Parcel Service Inc. | — | 0.65% | 2.02% | 6.78% | 9.58% | -3.57% | |
Based on: 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31), 10-K (reporting date: 2020-05-31).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × -3,046 ÷ 87,926 = -3.46%
3 Click competitor name to see calculations.
The financial data reveals several notable trends in the company's economic profit, revenue, and economic profit margin over the six-year period from 2020 to 2025.
- Revenue
- Revenue exhibited a generally increasing trend from 2020 to 2022, rising from approximately $69.2 billion in 2020 to $93.5 billion in 2022. However, from 2022 onward, revenue declined slightly, reaching about $87.7 billion by 2025. This pattern suggests a peak in revenue in 2022, followed by a period of mild contraction through to 2025.
- Economic Profit
- Economic profit remained negative throughout the entire period, indicating persistent economic losses despite positive revenues. The economic profit showed some fluctuations, with a notable improvement in 2021 when the loss narrowed significantly from -$3,355 million in 2020 to -$567 million. However, economic profit deteriorated again from 2022 to 2025, especially in 2024, where losses peaked at -$3,678 million before slightly improving to -$3,046 million in 2025. These fluctuations point to challenges in generating returns above the cost of capital despite variations in revenue.
- Economic Profit Margin
- The economic profit margin remained negative across all years, consistent with the negative economic profit figures. The margin improved markedly in 2021, moving from -4.85% in 2020 to -0.68% in 2021, indicating better efficiency or cost management in that year. However, from 2022 onwards, the margin declined again, reaching -4.19% in 2024 and slightly improving to -3.46% by 2025. This trend reflects a worsening economic profitability relative to sales during the latter years, despite a relatively stable revenue base.
In summary, while revenue growth was initially strong through 2022, it softened thereafter. Economic profit and economic profit margin both showed temporary improvement in 2021 but reverted to negative trends subsequently. This indicates structural challenges in achieving economic profitability despite sustained revenue generation levels.