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.
Paying user area
Try for free
Lockheed Martin Corp. pages available for free this week:
- Balance Sheet: Assets
- Cash Flow Statement
- Analysis of Profitability Ratios
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Total Asset Turnover since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Lockheed Martin Corp. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Lockheed Martin Corp., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT exhibits a fluctuating trend over the five-year period. Starting at 7,202 million USD in 2020, it declines gradually to 5,745 million USD by 2022. A recovery is observed in 2023, with NOPAT rising to 6,983 million USD, followed by a notable decrease to 5,464 million USD in 2024. Overall, the profit demonstrates volatility without a clear upward or downward trajectory.
- Cost of Capital
- The cost of capital shows a moderate increase from 8.68% in 2020 to a peak of 8.93% in 2022. After this peak, a slight decline occurs in the subsequent years, decreasing to 8.76% in 2023 and further to 8.71% in 2024. The range of variation is relatively narrow, indicating stable capital cost conditions with minor fluctuations over time.
- Invested Capital
- Invested capital remains relatively stable, starting at 28,054 million USD in 2020, with minor fluctuations observed throughout the years. There is a dip to 26,603 million USD in 2022, followed by a gradual increase, reaching 28,784 million USD in 2024. The invested capital levels reflect maintained or modestly increasing investment in company assets.
- Economic Profit
- Economic profit shows a downward trend from 4,766 million USD in 2020 to 3,369 million USD in 2022. A partial recovery is present in 2023, with economic profit rising to 4,579 million USD, but it declines again in 2024 to 2,956 million USD, the lowest in the five-year span. This pattern suggests challenges in generating returns above the cost of capital, reflecting pressures on value creation in recent years.
Net Operating Profit after Taxes (NOPAT)
Lockheed Martin Corp., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in equity equivalents to net earnings.
3 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
4 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
5 Addition of after taxes interest expense to net earnings.
6 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
7 Elimination of after taxes investment income.
8 Elimination of discontinued operations.
- Net Earnings
- The net earnings demonstrate a fluctuating trend over the reported periods. Initially, there is a decrease from 6,833 million USD in 2020 to 6,315 million USD in 2021, followed by a further decline to 5,732 million USD in 2022. However, a recovery is observed in 2023 with net earnings rising to 6,920 million USD. In 2024, the net earnings again decline to 5,336 million USD. Overall, the net earnings exhibit volatility with no consistent upward or downward pattern.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT values mirror the pattern seen in net earnings, suggesting a close relationship between operating profitability and net results. It starts at 7,202 million USD in 2020 and decreases steadily to 6,442 million USD in 2021 and 5,745 million USD in 2022. Similar to net earnings, NOPAT increases in 2023 to 6,983 million USD, then declines in 2024 to 5,464 million USD. This pattern indicates variations in operational efficiency and profitability impacting after-tax operating profit.
Cash Operating Taxes
Lockheed Martin Corp., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
- Federal and foreign income tax expense
- The federal and foreign income tax expense shows a fluctuating downward trend over the five-year period. Starting at 1,347 million US dollars in 2020, it decreased to 1,235 million in 2021 and further declined to 948 million in 2022. There was a slight recovery to 1,178 million in 2023, followed by another decline to 884 million in 2024. Overall, the tax expense decreased notably from 2020 to 2024, indicating potential changes in income levels, tax rates, or tax planning strategies.
- Cash operating taxes
- The cash operating taxes exhibit a clear upward trend for the initial three years, increasing from 1,424 million US dollars in 2020 to a peak of 1,910 million in 2022. Post-2022, there is a declining trend with amounts falling to 1,825 million in 2023 and further to 1,662 million in 2024. Despite the recent decreases, the overall level of cash operating taxes in 2024 remains higher than in 2020, suggesting higher operational tax outflows over the medium term, possibly due to increased taxable income or changes in tax payment schedules.
Invested Capital
Lockheed Martin Corp., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of equity equivalents to stockholders’ equity.
4 Removal of accumulated other comprehensive income.
5 Subtraction of construction in progress.
6 Subtraction of marketable securities.
- Total Reported Debt & Leases
-
The total reported debt and leases demonstrate a consistent upward trend over the analyzed period. Starting at 13,284 million USD in 2020, the amount slightly decreased to 13,076 million USD in 2021 but then increased significantly to 16,764 million USD in 2022. This growth continued in subsequent years, reaching 18,636 million USD in 2023 and further rising to 21,418 million USD by the end of 2024. This pattern indicates an increasing reliance on debt and leases as a component of the company’s financial structure.
- Stockholders’ Equity
-
Stockholders’ equity showed volatility during the reviewed timeframe. The value grew substantially from 6,015 million USD in 2020 to a peak of 10,959 million USD in 2021. However, a decline followed, dropping to 9,266 million USD in 2022. The downward trend persisted in 2023 and 2024, with equity decreasing further to 6,835 million USD and 6,333 million USD respectively. The decrease after 2021 suggests potential challenges in retained earnings or other equity components, affecting the company’s net worth from the shareholders’ perspective.
- Invested Capital
-
Invested capital fluctuated over the period under consideration. It started at 28,054 million USD in 2020, marginally increasing to 28,620 million USD in 2021. This was followed by a decline to 26,603 million USD in 2022, then a modest recovery to 27,427 million USD in 2023 and a subsequent increase to 28,784 million USD in 2024. The invested capital trend overall appears relatively stable with minor fluctuations, indicating ongoing capital investment activities that align with the company’s operational and strategic initiatives.
- Summary Observations
-
Overall, the financial data reveals a notable increase in leverage, with debt and leases rising considerably over the five years, potentially increasing financial risk. Meanwhile, stockholders’ equity exhibited significant growth initially but suffered a steady decline after 2021, which may signal profitability or capital structure concerns. Invested capital remained comparatively stable, suggesting consistent reinvestment in the company’s asset base despite the observed fluctuations. These patterns might reflect strategic decisions affecting financial policy, capital structure, and risk management.
Cost of Capital
Lockheed Martin Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Outstanding debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt3 | ÷ | = | × | × (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 Outstanding debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt3 | ÷ | = | × | × (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 Outstanding debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Outstanding debt3 | ÷ | = | × | × (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 Outstanding debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Lockheed Martin Corp., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit demonstrates a fluctuating trend over the observed five-year period. It initially declines from 4766 million USD in 2020 to 3369 million USD in 2022, suggesting a decrease in value generation or profitability during this timeframe. In 2023, there is a significant recovery to 4579 million USD, followed by a notable decline to 2956 million USD in 2024. This pattern indicates variability in the company’s ability to generate economic profit, with the most recent year showing a reduction compared to previous years.
- Invested Capital
- The invested capital exhibits relative stability with minor variations. From 28054 million USD in 2020, it rises slightly to 28620 million USD in 2021, then declines to 26603 million USD in 2022. Subsequently, it increases again to 27427 million USD in 2023 and continues upward to 28784 million USD in 2024. This indicates that the company’s capital investment has experienced some fluctuations but generally maintains a stable base over the period.
- Economic Spread Ratio
- The economic spread ratio, an indicator of the return spread on invested capital, shows a decreasing trend over the five years. It starts at 16.99% in 2020 and steadily falls to 12.67% in 2022. In 2023, there is a rebound to 16.7%, closely mirroring the initial value, followed by a sharp decrease to 10.27% in 2024. This decline in the economic spread ratio over the longer term suggests pressure on the company’s ability to generate returns above its cost of capital, with a slight recovery in 2023 that is not sustained into 2024.
- Overall Insights
- The financial indicators reflect a period of variability and recent challenges. Economic profit and economic spread ratio experienced dips through 2022, followed by temporary recovery in 2023 and sharp declines in 2024. Invested capital remains relatively stable, indicating that fluctuations in economic profit and spread are more likely related to operational efficiency or market conditions rather than changes in capital structure. The data suggests that the company faces difficulties sustaining economic profitability and return spreads, especially evident in the most recent year.
Economic Profit Margin
Lockheed Martin Corp., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Net sales | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a generally positive trend over the analyzed years, increasing from $65,398 million in 2020 to $71,043 million in 2024. The sales figures exhibited minor fluctuations, with a slight decline in 2022 but a subsequent recovery and growth through 2023 and 2024.
- Economic Profit
- Economic profit showed a downward trend overall, starting at $4,766 million in 2020 and gradually declining to $2,956 million by 2024. While there was a significant decrease from 2020 to 2022, an increase occurred in 2023 before another decline in 2024. This pattern suggests volatility in profitability despite increasing sales.
- Economic Profit Margin
- Economic profit margin, which represents economic profit as a percentage of net sales, declined steadily from 7.29% in 2020 to 4.16% in 2024. This indicates a decreasing efficiency in generating economic profit relative to sales. A slight recovery was observed in 2023, but the margin decreased sharply again in 2024.
- Summary of Trends
- Overall, while revenue growth was observed across the period, economic profit and its margin decreased, indicating that the increase in sales did not translate proportionally into increased economic profit. The economic profit margin's decline suggests potential rising costs or reduced operational efficiencies affecting profitability. The fluctuations in economic profit, especially the increase in 2023, may point to specific operational or market factors impacting profitability in that year.