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 – 13.08% × 70,379 = -4,293
The period between May 31, 2020, and May 31, 2025, demonstrates a consistent pattern of negative economic profit. While net operating profit after taxes (NOPAT) and invested capital generally increased between 2020 and 2022, the cost of capital remained substantial, resulting in economic losses each year. NOPAT experienced volatility, peaking in 2021 before declining in subsequent years. Invested capital exhibited a steady upward trend throughout the analyzed period, though the rate of increase slowed from 2023 to 2025. The cost of capital also fluctuated, peaking in 2021 and 2024, before decreasing slightly in 2025.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT increased significantly from US$2,531 million in 2020 to US$7,163 million in 2021, representing a substantial improvement in operational profitability. However, NOPAT then decreased to US$5,014 million in 2022 and continued to decline, reaching US$4,913 million in 2025. This suggests a weakening of core operational performance after the initial surge.
- Cost of Capital
- The cost of capital rose from 11.79% in 2020 to 13.99% in 2021, coinciding with the increase in NOPAT. It then decreased to 12.99% in 2022, before rising again to 14.27% in 2024. A slight decrease to 13.08% was observed in 2025. The fluctuations in the cost of capital likely reflect changes in market conditions and the company’s risk profile.
- Invested Capital
- Invested capital consistently increased throughout the period, rising from US$57,553 million in 2020 to US$70,379 million in 2025. The largest increase occurred between 2020 and 2022. The rate of growth slowed in the later years, indicating a potential stabilization of capital investment.
- Economic Profit
- Economic profit remained negative throughout the entire period, ranging from -US$4,256 million in 2020 to -US$5,071 million in 2024. The most negative economic profit was recorded in 2024. While NOPAT increased in 2021, it was insufficient to offset the high cost of capital and substantial invested capital base. The continued negative economic profit suggests that the company is not generating returns exceeding its cost of capital.
The consistent negative economic profit indicates that, despite increases in NOPAT and invested capital, the company’s returns are not adequately compensating investors for the risk associated with their capital. The increasing invested capital base, coupled with a relatively high cost of capital, contributes to the widening economic loss observed in the later years of the period.
AI Ask an analyst for more
Net Operating Profit after Taxes (NOPAT)
FedEx Corp., NOPAT calculation
US$ 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.
AI Ask an analyst for more
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.
AI Ask an analyst for more
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.
AI Ask an analyst for more
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 | × | 19.69% | = | 11.92% | ||
| 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 | 13.08% | ||||||||||
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 | × | 19.69% | = | 13.34% | ||
| 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 | 14.27% | ||||||||||
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 | × | 19.69% | = | 12.59% | ||
| 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 | 13.58% | ||||||||||
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 | × | 19.69% | = | 12.01% | ||
| 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 | 12.99% | ||||||||||
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 | × | 19.69% | = | 13.15% | ||
| 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 | 13.99% | ||||||||||
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 | × | 19.69% | = | 10.53% | ||
| 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 | 11.79% | ||||||||||
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 | (4,293) | (5,071) | (4,020) | (3,623) | (1,822) | (4,256) | |
| Invested capital2 | 70,379) | 70,265) | 69,545) | 66,462) | 64,229) | 57,553) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -6.10% | -7.22% | -5.78% | -5.45% | -2.84% | -7.40% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Uber Technologies Inc. | 14.02% | 6.16% | -3.66% | -73.66% | -22.82% | — | |
| Union Pacific Corp. | -2.52% | -3.19% | -3.29% | -1.38% | -2.24% | — | |
| United Airlines Holdings Inc. | -2.64% | -1.81% | 0.87% | -3.35% | -10.27% | — | |
| United Parcel Service Inc. | -2.39% | -1.93% | 0.78% | 11.75% | 17.58% | — | |
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 × -4,293 ÷ 70,379 = -6.10%
4 Click competitor name to see calculations.
The financial performance, as indicated by economic value added metrics, demonstrates a consistent pattern of negative economic profit over the observed period. While invested capital has generally increased, the economic spread ratio reveals a concerning trend in value creation.
- Economic Profit
- Economic profit consistently registers as negative across all reported years, ranging from a low of -5,071 US$ millions in 2023 to a high of -1,822 US$ millions in 2021. The magnitude of the negative economic profit appears to be increasing in recent years, with 2023 and 2024 showing the largest deficits. A slight decrease in the absolute value of the loss is observed in the final year, 2025, but remains substantially negative.
- Invested Capital
- Invested capital exhibits a generally upward trajectory, increasing from 57,553 US$ millions in 2020 to 70,379 US$ millions in 2025. The rate of increase slows over time, with the smallest increment occurring between 2024 and 2025. This suggests a potential stabilization in capital deployment, despite continued negative economic profit.
- Economic Spread Ratio
- The economic spread ratio, expressed as a percentage, consistently reflects negative value creation. The ratio worsens from -7.40% in 2020 to -7.22% in 2024, indicating a diminishing ability to generate returns exceeding the cost of capital. A modest improvement is noted in 2025, with the ratio increasing to -6.10%, though it remains negative. This suggests that while the company is investing more capital, it is not effectively translating those investments into positive economic returns.
Overall, the analysis indicates a sustained period of value destruction. Despite increases in invested capital, the company has been unable to generate positive economic profit, as evidenced by the consistently negative economic spread ratio. The slight improvement in the economic spread ratio in the final year warrants further investigation, but the overall trend remains unfavorable.
AI Ask an analyst for more
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 | (4,293) | (5,071) | (4,020) | (3,623) | (1,822) | (4,256) | |
| Revenue | 87,926) | 87,693) | 90,155) | 93,512) | 83,959) | 69,217) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -4.88% | -5.78% | -4.46% | -3.87% | -2.17% | -6.15% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Uber Technologies Inc. | 4.25% | 2.09% | -1.54% | -37.76% | -21.02% | — | |
| Union Pacific Corp. | -6.55% | -8.16% | -8.39% | -3.31% | -5.99% | — | |
| United Airlines Holdings Inc. | -2.23% | -1.56% | 0.73% | -3.05% | -21.63% | — | |
| United Parcel Service Inc. | -1.36% | -1.02% | 0.39% | 5.25% | 8.02% | — | |
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 × -4,293 ÷ 87,926 = -4.88%
3 Click competitor name to see calculations.
The economic profit margin demonstrates a consistent pattern of negative values over the observed period, indicating the company consistently generates economic losses. The magnitude of these losses has generally increased over time, though with some fluctuation.
- Economic Profit Margin Trend
- The economic profit margin began at -6.15% in May 31, 2020. It improved to -2.17% in May 31, 2021, representing a decrease in the magnitude of the economic loss. However, the margin subsequently deteriorated, reaching -3.87% in May 31, 2022, -4.46% in May 31, 2023, and further declining to -5.78% in May 31, 2024. A slight improvement is noted in the most recent period, with the margin at -4.88% as of May 31, 2025.
Revenue exhibited an increasing trend from May 31, 2020, to May 31, 2022, rising from US$69,217 million to US$93,512 million. However, revenue then experienced a decline, falling to US$90,155 million in May 31, 2023, and continuing to US$87,693 million in May 31, 2024. Revenue shows a minimal increase to US$87,926 million in May 31, 2025.
- Relationship between Revenue and Economic Profit Margin
- Despite the initial revenue growth, the economic profit margin did not improve proportionally. The increasing negative margin alongside growing revenue suggests that the cost of capital, or operational inefficiencies, are increasing at a faster rate than revenue. The subsequent decline in revenue did not lead to an improvement in the economic profit margin, indicating that factors beyond revenue are significantly impacting profitability. The slight revenue increase in the latest period did not translate into a significant improvement in the economic profit margin.
Economic profit itself consistently reflects losses, starting at -US$4,256 million in May 31, 2020, and generally increasing in absolute value to -US$5,071 million in May 31, 2024, before decreasing slightly to -US$4,293 million in May 31, 2025. This reinforces the conclusion that the company is not generating returns exceeding its cost of capital.
- Overall Assessment
- The observed trends indicate a concerning pattern of economic losses that are not being offset by revenue growth. While a minor improvement is seen in the latest period, the overall trajectory suggests underlying issues related to cost management or capital allocation that require attention.
AI Ask an analyst for more