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
Las Vegas Sands Corp., economic profit 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 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
= -997 – 14.76% × 18,926 = -3,790
The financial trajectory from 2018 to 2022 is characterized by a severe transition from positive economic value creation to substantial value destruction. While the initial two years of the period demonstrated growth and efficiency, the subsequent three years reflect a profound collapse in operating profitability and a failure to generate returns exceeding the cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- A significant volatility in NOPAT is evident, with a peak of 3,870 million US$ in 2019 followed by a sharp decline to negative 1,708 million US$ in 2020. Although a gradual upward trend is observed from 2020 through 2022, NOPAT remained negative throughout this interval, ending at negative 997 million US$ in 2022. This indicates a sustained inability to generate positive operating income after taxes during the latter part of the period.
- Cost of Capital and Invested Capital
- The cost of capital remained relatively stable, fluctuating within a narrow range between 13.91% and 15.60%. Concurrently, invested capital followed a U-shaped pattern; it decreased steadily from 19,047 million US$ in 2018 to a low of 15,828 million US$ in 2021, before rebounding sharply to 18,926 million US$ in 2022. The increase in invested capital in 2022, occurring while NOPAT remained negative, exacerbated the economic deficit.
- Economic Profit and Shareholder Value
- Economic profit shifted from a positive 378 million US$ in 2018 to a peak of 1,070 million US$ in 2019, signaling effective value creation. However, a drastic reversal occurred in 2020, with economic profit plummeting to negative 4,045 million US$. Despite a slight improvement in 2021, the figure returned to negative 3,790 million US$ by 2022. These results confirm that the returns on invested capital were insufficient to cover the cost of financing, resulting in persistent destruction of economic value from 2020 onward.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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
= 170 × 4.90% = 8
5 2022 Calculation
Tax benefit of interest expense, net of amounts capitalized = Adjusted interest expense, net of amounts capitalized × Statutory income tax rate
= 710 × 21.00% = 149
6 Addition of after taxes interest expense to net income (loss) attributable to Las Vegas Sands Corp..
7 Elimination of discontinued operations.
The financial performance from 2018 to 2022 is characterized by a period of initial growth followed by a severe contraction and a fragmented recovery. Both Net Income and Net Operating Profit After Taxes (NOPAT) exhibit high volatility, reflecting significant disruptions in operational viability during the middle of the observed period.
- Net Income Trajectory
- Net income demonstrated growth between 2018 and 2019, rising from US$ 2,413 million to US$ 2,698 million. A sharp reversal occurred in 2020, resulting in a loss of US$ 1,685 million, with further losses of US$ 961 million recorded in 2021. A return to profitability was observed in 2022, as net income recovered to US$ 1,832 million.
- Net Operating Profit After Taxes (NOPAT) Performance
- NOPAT mirrored the initial growth trend, increasing from US$ 3,351 million in 2018 to US$ 3,870 million in 2019. This was followed by a steep decline into negative territory in 2020, reaching -US$ 1,708 million. While the deficit narrowed to -US$ 1,040 million in 2021 and -US$ 997 million in 2022, the metric failed to return to positive values within the analyzed timeframe.
- Analysis of Operational Divergence
- A significant divergence between net income and NOPAT is evident in 2022. While the bottom-line net income returned to a positive state, NOPAT remained negative. This suggests that the core operating activities did not generate sufficient after-tax profit to offset the operational costs, implying that the recovery in net income may have been driven by non-operating items rather than a full restoration of operating efficiency. The sustained negative NOPAT from 2020 through 2022 indicates a prolonged period where the company failed to generate positive operating value.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 indicates a period of significant volatility in tax-related outflows between 2018 and 2022, characterized by a sharp decline in 2020 followed by a gradual recovery. A strong correlation exists between income tax expenses and cash operating taxes, although the latter remained positive throughout the entire period, even when the former transitioned into tax benefits.
- Income Tax Expense Trends
- Income tax expenses peaked in 2019 at 468 million USD before plummeting to a tax benefit of 38 million USD in 2020 and 5 million USD in 2021. This inversion suggests a period of taxable losses or the recognition of deferred tax assets. A return to a positive tax expense of 154 million USD was observed in 2022, signaling a recovery in taxable profitability, although this figure remains substantially lower than the 2018 and 2019 levels.
- Cash Operating Taxes Analysis
- Cash operating taxes exhibited a similar trajectory, rising from 370 million USD in 2018 to 431 million USD in 2019. A severe contraction occurred in 2020, with payments dropping to 110 million USD. Subsequently, a consistent upward trend emerged, with cash taxes increasing to 172 million USD in 2021 and reaching 305 million USD by 2022. This represents a recovery to approximately 71% of the 2019 peak.
- Variance Between Accrual and Cash Taxes
- A notable divergence is observed during the 2020 and 2021 fiscal years. While the income tax expense reflected benefits (negative values), cash operating taxes remained positive. This indicates that the entity continued to incur non-income-related cash tax obligations—such as property or excise taxes—despite the absence of a GAAP income tax liability. The gap between these two metrics narrowed by 2022 as both values returned to positive territory.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 invested capital exhibited a downward trajectory between 2018 and 2021, decreasing from 19,047 million US$ to 15,828 million US$. This period of contraction was followed by a significant rebound in 2022, where invested capital rose to 18,926 million US$, nearly returning to the levels observed at the start of the five-year period.
- Total Reported Debt and Leases
- A consistent upward trend in leverage is observed following 2019. After a slight dip to 12,825 million US$ in 2019, debt and lease obligations grew steadily every year, reaching 16,148 million US$ by December 31, 2022. This represents a total increase of approximately 21% from the 2018 baseline.
- Stockholders' Equity
- Equity experienced severe volatility and a substantial decline during the analysis period. From a high of 5,684 million US$ in 2018, equity fell sharply to a low of 1,996 million US$ in 2021, a reduction of approximately 65%. A partial recovery occurred in 2022, with equity increasing to 3,881 million US$.
The fluctuations in total invested capital were primarily driven by the inverse relationship between debt and equity from 2019 to 2021. During this interval, the significant erosion of stockholders' equity outweighed the gradual increase in reported debt, resulting in a net decrease in the capital base. The sharp increase in invested capital in 2022 is attributable to a simultaneous rise in both total debt and a recovery in equity, indicating a broader expansion of the company's capital structure.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Cost of Capital
Las Vegas Sands Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 44,389) | 44,389) | ÷ | 59,699) | = | 0.74 | 0.74 | × | 18.76% | = | 13.95% | ||
| Long-term debt, including current maturities3 | 15,140) | 15,140) | ÷ | 59,699) | = | 0.25 | 0.25 | × | 3.99% × (1 – 21.00%) | = | 0.80% | ||
| Operating lease liability4 | 170) | 170) | ÷ | 59,699) | = | 0.00 | 0.00 | × | 4.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 59,699) | 1.00 | 14.76% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ 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 | 33,768) | 33,768) | ÷ | 48,996) | = | 0.69 | 0.69 | × | 18.76% | = | 12.93% | ||
| Long-term debt, including current maturities3 | 15,060) | 15,060) | ÷ | 48,996) | = | 0.31 | 0.31 | × | 3.99% × (1 – 21.00%) | = | 0.97% | ||
| Operating lease liability4 | 168) | 168) | ÷ | 48,996) | = | 0.00 | 0.00 | × | 4.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 48,996) | 1.00 | 13.91% | ||||||||||
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 | 42,447) | 42,447) | ÷ | 57,920) | = | 0.73 | 0.73 | × | 18.76% | = | 13.75% | ||
| Long-term debt, including current maturities3 | 15,150) | 15,150) | ÷ | 57,920) | = | 0.26 | 0.26 | × | 4.30% × (1 – 21.00%) | = | 0.89% | ||
| Operating lease liability4 | 323) | 323) | ÷ | 57,920) | = | 0.01 | 0.01 | × | 4.60% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 57,920) | 1.00 | 14.66% | ||||||||||
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 | 51,014) | 51,014) | ÷ | 64,557) | = | 0.79 | 0.79 | × | 18.76% | = | 14.82% | ||
| Long-term debt, including current maturities3 | 13,210) | 13,210) | ÷ | 64,557) | = | 0.20 | 0.20 | × | 4.34% × (1 – 21.00%) | = | 0.70% | ||
| Operating lease liability4 | 333) | 333) | ÷ | 64,557) | = | 0.01 | 0.01 | × | 4.60% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 64,557) | 1.00 | 15.54% | ||||||||||
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 | 47,751) | 47,751) | ÷ | 60,715) | = | 0.79 | 0.79 | × | 18.76% | = | 14.75% | ||
| Long-term debt, including current maturities3 | 11,650) | 11,650) | ÷ | 60,715) | = | 0.19 | 0.19 | × | 5.05% × (1 – 21.00%) | = | 0.77% | ||
| Operating lease liability4 | 1,314) | 1,314) | ÷ | 60,715) | = | 0.02 | 0.02 | × | 5.05% × (1 – 21.00%) | = | 0.09% | ||
| Total: | 60,715) | 1.00 | 15.60% | ||||||||||
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 | (3,790) | (3,242) | (4,045) | 1,070) | 378) | |
| Invested capital2 | 18,926) | 15,828) | 15,949) | 18,011) | 19,047) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | -20.03% | -20.48% | -25.36% | 5.94% | 1.99% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Airbnb Inc. | 11.02% | -11.09% | — | — | — | |
| Booking Holdings Inc. | 3.80% | -13.64% | — | — | — | |
| Chipotle Mexican Grill Inc. | 2.82% | -1.67% | — | — | — | |
| DoorDash, Inc. | -53.20% | -39.71% | — | — | — | |
| McDonald’s Corp. | 5.84% | 8.26% | — | — | — | |
| Starbucks Corp. | 2.81% | 4.06% | -8.49% | — | — | |
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 × -3,790 ÷ 18,926 = -20.03%
4 Click competitor name to see calculations.
The financial trajectory between 2018 and 2022 is characterized by a sharp transition from value creation to significant value destruction. A period of growth in economic profit and spread ratios through 2019 was followed by a severe collapse in 2020, with performance failing to return to positive territory through the end of 2022.
- Economic Profit Trends
- Economic profit exhibited an upward trend initially, rising from 378 million US dollars in 2018 to 1,070 million US dollars in 2019. A critical reversal occurred in 2020, with economic profit falling to negative 4,045 million US dollars. This downward trend persisted over the subsequent two years, with losses of 3,242 million US dollars in 2021 and 3,790 million US dollars in 2022.
- Invested Capital Analysis
- Invested capital showed a period of contraction between 2018 and 2021, decreasing from 19,047 million US dollars to 15,828 million US dollars. However, a recovery in capital deployment was observed in 2022, as invested capital increased to 18,926 million US dollars, nearly returning to 2018 levels despite the continued negative economic profit.
- Economic Spread Ratio Performance
- The economic spread ratio improved from 1.99% in 2018 to a peak of 5.94% in 2019, indicating that returns exceeded the cost of capital. A severe contraction followed in 2020, with the ratio dropping to negative 25.36%. Although a marginal recovery is noted in 2021 and 2022, with the ratio stabilizing around negative 20%, the spread remains deeply negative, confirming a sustained failure to generate returns above the cost of invested capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
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 | (3,790) | (3,242) | (4,045) | 1,070) | 378) | |
| Net revenues | 4,110) | 4,234) | 3,612) | 13,739) | 13,729) | |
| Performance Ratio | ||||||
| Economic profit margin2 | -92.21% | -76.56% | -112.00% | 7.79% | 2.76% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Airbnb Inc. | 8.75% | -10.03% | — | — | — | |
| Booking Holdings Inc. | 3.04% | -18.68% | — | — | — | |
| Chipotle Mexican Grill Inc. | 1.75% | -1.21% | — | — | — | |
| DoorDash, Inc. | -42.99% | -25.83% | — | — | — | |
| McDonald’s Corp. | 11.43% | 16.97% | — | — | — | |
| Starbucks Corp. | 1.79% | 3.31% | -8.28% | — | — | |
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 × -3,790 ÷ 4,110 = -92.21%
3 Click competitor name to see calculations.
The period from 2018 to 2022 exhibits a stark divergence in economic performance, shifting from consistent value creation to substantial economic value destruction. An initial phase of growth in profitability was followed by a severe contraction in revenue and a transition to deep negative economic profits, reflecting a period where the cost of capital significantly exceeded returns.
- Economic Profit Trends
- Economic profit demonstrated an upward trajectory between 2018 and 2019, rising from 378 million USD to 1,070 million USD. However, a sharp reversal occurred in 2020, with economic profit falling to negative 4,045 million USD. Despite a slight improvement in 2021, the figure remained deeply negative, ending 2022 at negative 3,790 million USD.
- Net Revenue Volatility
- Revenues remained stable and high in 2018 and 2019, hovering around 13.7 billion USD. A precipitous decline was observed in 2020, where revenues dropped to 3,612 million USD. Revenues showed marginal recovery in 2021 and 2022 but remained stagnant at approximately 4.1 billion to 4.2 billion USD, representing a fraction of the pre-2020 levels.
- Economic Profit Margin Analysis
- The economic profit margin expanded from 2.76% in 2018 to 7.79% in 2019, indicating efficient capital utilization. This trend collapsed in 2020 to -112.00%, signaling a critical failure to cover the cost of capital. While the margin moderated to -76.56% in 2021, it deteriorated again to -92.21% by 2022, underscoring a persistent inability to restore economic value creation.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?