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.
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Las Vegas Sands Corp. pages available for free this week:
- Common-Size Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Analysis of Revenues
- Analysis of Debt
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Economic Profit
Las Vegas Sands Corp., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial trajectory from 2018 to 2022 indicates a significant shift from economic value creation to substantial value destruction. After a period of growth in economic profit during the first two years of the period, a severe downturn beginning in 2020 led to consistent negative economic profit, signifying that the returns on invested capital failed to cover the cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- A peak in NOPAT was reached in 2019 at US$ 3,870 million, followed by a sharp reversal in 2020 to a loss of US$ 1,708 million. While subsequent years showed marginal improvements, reaching a loss of US$ 997 million by 2022, the operating profit remained negative for three consecutive years, serving as the primary driver for the erosion of economic profit.
- Cost of Capital
- The cost of capital remained relatively stable throughout the five-year period, fluctuating within a narrow range between 13.87% and 15.55%. A slight decline was observed from 2018 through 2021, with a minor increase to 14.71% in 2022. This stability indicates that the collapse in economic profit was not caused by an increase in the required rate of return, but rather by the collapse in operational earnings.
- Invested Capital
- Invested capital showed a contraction trend from 2018 (US$ 19,047 million) through 2021 (US$ 15,828 million). However, 2022 saw a significant increase to US$ 18,926 million. This expansion of the capital base in 2022, occurring while NOPAT remained negative, contributed to the continued pressure on economic profit.
- Economic Profit
- Economic profit transitioned from a positive US$ 1,079 million in 2019 to a deficit of US$ 4,038 million in 2020. Despite a slight recovery in 2021, the economic profit remained deeply negative through 2022, closing at US$ -3,781 million. This trend confirms a prolonged period where the company failed to generate sufficient operating returns to exceed its cost of capital.
Net Operating Profit after Taxes (NOPAT)
Las Vegas Sands Corp., NOPAT calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in provision for credit losses.
3 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Las Vegas Sands Corp..
4 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2022 Calculation
Tax benefit of interest expense, net of amounts capitalized = Adjusted interest expense, net of amounts capitalized × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income (loss) attributable to Las Vegas Sands Corp..
7 Elimination of discontinued operations.
The data reveals notable fluctuations in the profitability of the company over the five-year period. Both net income attributable to the company and net operating profit after taxes (NOPAT) follow a similar trajectory, indicating consistent trends in core profitability measures.
- 2018 to 2019
- There is a positive growth trend in profitability. Net income increased from 2413 million USD to 2698 million USD, while NOPAT grew from 3351 million USD to 3870 million USD. This indicates improved operational efficiency and overall financial performance during this period.
- 2019 to 2020
- A significant decline is evident, with net income shifting from a strong positive figure to a substantial loss of 1685 million USD. Similarly, NOPAT declined sharply to a negative value of 1708 million USD. This suggests a severe disruption in operations or adverse market conditions affecting profitability.
- 2020 to 2021
- While still negative, there is an improvement in financial results compared to 2020. Net income losses reduced to 961 million USD and NOPAT losses to 1040 million USD, indicating a partial recovery or better cost management despite continuing challenges.
- 2021 to 2022
- Profitability returns to positive territory, with net income reported at 1832 million USD. However, NOPAT remains negative at 997 million USD, though with an improvement relative to previous years. This disparity may point to differences in tax effects or non-operating items influencing net income positively.
Overall, the data highlights a period marked by major volatility. Initial growth gave way to steep declines and losses in 2020 and 2021, likely reflecting exceptional external pressures. The return to positive net income in 2022 signals a potential stabilization or recovery phase, despite ongoing operational challenges as suggested by the continued negative NOPAT.
Cash Operating Taxes
Las Vegas Sands Corp., cash operating taxes calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
The financial data reveals distinct fluctuations in tax-related expenses and cash outflows over the analyzed period.
- Income Tax Expense (Benefit)
- From 2018 to 2019, there is a marked increase in income tax expense, rising from 375 million to 468 million US dollars. This trend reversed sharply in 2020 and 2021, where the figures turned negative, indicating income tax benefits (or credits) of 38 million and 5 million US dollars respectively. In 2022, the tax expense reverted to a positive amount of 154 million US dollars, though it remained significantly lower than the pre-2020 levels.
- Cash Operating Taxes
- Cash operating taxes show a somewhat different pattern. There is an initial decline from 370 million US dollars in 2018 to 431 million US dollars in 2019, after which a steep reduction is noted in 2020 to 110 million US dollars. Despite the partial recovery to 172 million in 2021, the cash operating taxes notably increase in 2022, reaching 305 million US dollars. Despite this increase, the 2022 level remains below levels seen in 2018 and 2019.
Overall, the data indicates a significant impact on income tax expense and cash tax payments from 2020 onward, possibly linked to external or extraordinary factors influencing taxable income and tax payment obligations. While income tax expense shifted into credits during 2020 and 2021, cash operating taxes, although reduced, remained positive with an upward trend resuming in 2022. This reflects variability in tax dynamics, suggesting changing profitability or tax regulation impacts during these years.
Invested Capital
Las Vegas Sands Corp., invested capital calculation (financing approach)
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
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 equity equivalents to total Las Vegas Sands Corp. stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
- Total reported debt & leases
-
The total reported debt and leases exhibit an overall upward trend from 2018 to 2022. Starting at 13,299 million USD in 2018, the figure slightly decreased to 12,825 million USD in 2019. However, it then increased consistently over the next three years, reaching 14,330 million USD in 2020, 14,963 million USD in 2021, and peaking at 16,148 million USD in 2022. This pattern indicates a gradual increase in the company’s leverage over the period, with a notable rise following 2019.
- Total Las Vegas Sands Corp. stockholders’ equity
-
The stockholders’ equity experienced a declining trend from 2018 through 2021, indicative of a reduction in the company's net worth ascribed to shareholders. Equity decreased from 5,684 million USD in 2018 to 5,187 million USD in 2019, then sharply declined to 2,973 million USD in 2020 and further to 1,996 million USD in 2021. In 2022, there was a partial recovery with equity increasing to 3,881 million USD. Despite this improvement, the 2022 equity remains significantly lower than the initial 2018 level.
- Invested capital
-
Invested capital showed a declining trend from 19,047 million USD in 2018 to 15,828 million USD in 2021, which may reflect reduced asset base or adjustments in the company’s capital structure. However, in 2022, invested capital increased to 18,926 million USD, nearly returning to the initial level observed in 2018. This suggests that after several years of contraction, there was a resurgence in the resources dedicated to the company's operations or investments in 2022.
- Overall observations
-
Throughout the period from 2018 to 2022, the company increased its debt and lease obligations, indicating a growing reliance on external financing. Concurrently, stockholders’ equity declined significantly until 2021 but partially rebounded in 2022, potentially reflecting changes such as retained earnings, losses or capital injections. Invested capital contracted steadily until 2021, then expanded in 2022, suggesting renewed investment activity or asset acquisition. The trends imply a period of financial adjustment and restructuring through 2020 and 2021, followed by an attempt to stabilize and strengthen the balance sheet in 2022.
Cost of Capital
Las Vegas Sands Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, including current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
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 | ÷ | = | × | = | |||||||||
| Long-term debt, including current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
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 | ÷ | = | × | = | |||||||||
| Long-term debt, including current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
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 | ÷ | = | × | = | |||||||||
| Long-term debt, including current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2019-12-31).
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 | ÷ | = | × | = | |||||||||
| Long-term debt, including current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2018-12-31).
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
Las Vegas Sands Corp., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial trajectory from 2018 to 2022 indicates a severe transition from value creation to significant value destruction. While the initial two-year period showed growth in economic efficiency, the subsequent three years were marked by substantial economic losses and a failure to generate returns exceeding the cost of capital.
- Economic Profit Trends
- A positive trend was initially observed, with economic profit increasing from 388 million USD in 2018 to 1,079 million USD in 2019. This was followed by a precipitous decline in 2020, where economic profit fell to negative 4,038 million USD. Despite a slight moderation of losses in 2021, the figure deteriorated again to negative 3,781 million USD by the end of 2022.
- Invested Capital Fluctuations
- Invested capital underwent a period of contraction between 2018 and 2021, decreasing from 19,047 million USD to a low of 15,828 million USD. However, this trend reversed sharply in 2022, with invested capital increasing to 18,926 million USD, nearly returning to 2018 levels despite the ongoing negative economic profit.
- Economic Spread Ratio Analysis
- The economic spread ratio serves as a primary indicator of the inability to cover the cost of capital starting in 2020. The ratio improved from 2.04% in 2018 to a peak of 5.99% in 2019, signaling efficient value generation. This was followed by a collapse to negative 25.32% in 2020. Although the ratio showed a marginal recovery to negative 19.98% by 2022, it remains deeply negative, confirming a persistent state of economic value destruction over the final three years of the period analyzed.
Economic Profit Margin
Las Vegas Sands Corp., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Net revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Airbnb Inc. | ||||||
| Booking Holdings Inc. | ||||||
| Chipotle Mexican Grill Inc. | ||||||
| DoorDash, Inc. | ||||||
| McDonald’s Corp. | ||||||
| Starbucks Corp. | ||||||
Based on: 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), 10-K (reporting date: 2018-12-31).
1 Economic profit. See details »
2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
A severe transition in value creation is observed between 2018 and 2022, characterized by a shift from positive economic profit to significant value destruction. The initial period of growth and stability was followed by a precipitous decline in both revenue and profitability beginning in 2020, from which a full recovery has not yet materialized.
- Net Revenue Trends
- Revenues remained consistent between 2018 and 2019, holding at approximately US$ 13.7 billion. A sharp contraction occurred in 2020, where revenues plummeted to US$ 3.61 billion. Despite a marginal increase to US$ 4.23 billion in 2021, revenues retreated slightly to US$ 4.11 billion by the end of 2022, remaining far below pre-2020 levels.
- Economic Profit Performance
- The company demonstrated positive economic profit in 2018 and 2019, with an increase from US$ 388 million to US$ 1.08 billion. This trend reversed abruptly in 2020, resulting in an economic loss of US$ 4.04 billion. While the loss narrowed slightly to US$ 3.24 billion in 2021, it widened again to US$ 3.78 billion in 2022, indicating a sustained inability to generate returns above the cost of capital.
- Economic Profit Margin Analysis
- The economic profit margin expanded from 2.83% in 2018 to a peak of 7.85% in 2019, signaling efficient value generation. In 2020, the margin collapsed to -111.79%, reflecting a catastrophic misalignment between operating returns and the cost of capital. Although there was a partial recovery to -76.40% in 2021, the margin deteriorated further to -91.99% in 2022, highlighting the profound impact of diminished revenues on the company's economic efficiency.