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
Newmont Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Newmont Corp. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Newmont Corp., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial performance, as measured by economic profit, exhibits a significant decline over the five-year period. Initially positive, economic profit transitioned to substantial losses, culminating in the largest loss in 2023. This trend is driven by fluctuations in net operating profit after taxes, the cost of capital, and invested capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT decreased substantially from US$3,486 million in 2019 to US$2,630 million in 2020, followed by a dramatic reduction to US$274 million in 2021. A loss of US$555 million was recorded in 2022, and this negative performance worsened considerably in 2023, reaching a loss of US$2,520 million. This represents a consistent downward trajectory in operational profitability.
- Cost of Capital
- The cost of capital experienced a slight increase from 9.93% in 2019 to 10.24% in 2021. It then decreased to 10.10% in 2022 and further to 9.57% in 2023. While fluctuations occurred, the cost of capital remained relatively stable, not being the primary driver of the declining economic profit.
- Invested Capital
- Invested capital initially increased from US$28,943 million in 2019 to US$29,461 million in 2020, then decreased to US$27,566 million in 2021 and US$23,044 million in 2022. A significant increase was observed in 2023, reaching US$36,379 million. This increase in invested capital in the latest year, coupled with the substantial NOPAT loss, contributed significantly to the largest economic profit loss.
- Economic Profit
- Economic profit began at US$611 million in 2019, indicating value creation. However, it turned negative in 2020 at US$-322 million, and the losses escalated significantly in subsequent years, reaching US$-2,547 million in 2021 and US$-2,882 million in 2022. The largest loss was recorded in 2023, amounting to US$-6,000 million. This demonstrates a consistent erosion of shareholder value over the period.
The substantial decline in NOPAT, particularly the move to a significant loss in 2023, is the primary factor driving the negative trend in economic profit. The increase in invested capital in 2023 further exacerbated the economic loss, despite a slight decrease in the cost of capital.
Net Operating Profit after Taxes (NOPAT)
Newmont Corp., NOPAT calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Newmont stockholders.
3 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
4 2023 Calculation
Tax benefit of interest expense, net of capitalized interest = Adjusted interest expense, net of capitalized interest × Statutory income tax rate
= × 21.00% =
5 Addition of after taxes interest expense to net income (loss) attributable to Newmont stockholders.
6 2023 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.
The financial data reveals significant fluctuations in profitability over the five-year period ending in 2023. Net income attributable to stockholders showed a positive trend through 2019 and 2020, peaking at approximately $2.8 billion in those years. However, a sharp decline is evident starting in 2021, where net income drops to around $1.2 billion, followed by a transition to negative territory in 2022 and 2023, with losses reaching nearly $0.4 billion and $2.5 billion respectively.
Similarly, the net operating profit after taxes (NOPAT) follows a comparable trajectory. It decreased from $3.5 billion in 2019 to $2.6 billion in 2020, then plummeted to just $274 million in 2021. The subsequent years show further deterioration into negative values, with losses of about $555 million in 2022 and $2.5 billion in 2023.
- Profitability Trends
- The company experienced robust profitability in 2019 and 2020, but profitability sharply declined starting in 2021, transitioning into losses by 2022 and 2023.
- Net Income Analysis
- Net income sustained positive values for the first three years analyzed, but the significant drop in 2021 indicates operational or market challenges. The losses in the last two years suggest ongoing issues impacting the bottom line.
- NOPAT Analysis
- NOPAT mirrored net income movements but showed an earlier and steeper decline, reflecting diminishing operational efficiency or increased expenses relative to operating profit.
- Overall
- The data suggests increasing financial strain from 2021 onward, with deteriorating profitability and operational performance. The downward trend in both net income and NOPAT highlights potential risks or negative developments affecting financial health.
Cash Operating Taxes
Newmont Corp., cash operating taxes calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
- Income and Mining Tax Expense
- The income and mining tax expense exhibited notable fluctuations over the five-year period. Initially, it decreased from 832 million US dollars in 2019 to 704 million in 2020. This decline was followed by a significant increase to 1,098 million in 2021, representing the highest value in the period under review. Subsequently, the expense dropped sharply to 455 million in 2022 before experiencing a moderate rise to 526 million in 2023. Overall, the tax expense shows a volatile pattern with a peak occurring in 2021 and lower values in the later years.
- Cash Operating Taxes
- Cash operating taxes demonstrated an overall upward trend from 2019 through 2021, increasing from 550 million to 1,262 million US dollars. The growth in this category was consistent and pronounced during these years. However, in 2022, there was a significant decline to 765 million, and this downward trend continued into 2023, with the amount further decreasing to 651 million. This pattern indicates strong growth in cash operating taxes during the initial years, followed by a substantial reduction in the final two years.
- Comparative Analysis
- Both income and mining tax expense and cash operating taxes peaked in 2021 before declining in the subsequent years. The variations in income and mining tax expense were more pronounced, exhibiting greater volatility, whereas cash operating taxes had a steadier increase prior to the decline. The decline in both categories after 2021 may suggest changes in operational efficiencies, tax policies, or variations in taxable income. The divergence in magnitude of fluctuations between the two items could imply differences in their calculation bases or timing recognition.
Invested Capital
Newmont Corp., invested capital calculation (financing approach)
US$ in millions
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of equity equivalents to total Newmont stockholders’ equity.
4 Removal of accumulated other comprehensive income.
5 Subtraction of construction-in-progress.
6 Subtraction of marketable securities and restricted marketable securities.
The financial data reveals several notable trends in the company's capital structure and financing activities over the five-year period ending December 31, 2023.
- Total Reported Debt & Leases
- The total reported debt and leases showed a generally declining trend from 2019 through 2022, dropping from $6,909 million in 2019 to $6,248 million in 2022. This reduction suggests the company was actively managing and reducing its debt obligations during this period. However, in 2023, there was a significant increase to $9,541 million, reversing the downward trend and indicating a substantial rise in leverage or new financing activities undertaken in that year.
- Total Newmont Stockholders’ Equity
- Stockholders’ equity increased from $21,420 million in 2019 to a peak of $23,008 million in 2020, reflecting growth in the equity base. The level then moderately declined in the following two years, reaching $19,354 million in 2022. In 2023, equity rebounded sharply to $29,027 million, exceeding all previous years in the data set. This sharp rise might indicate retained earnings accumulation, equity infusions, or favorable changes in asset valuations leading to an expanded equity base.
- Invested Capital
- Invested capital initially increased slightly from $28,943 million in 2019 to $29,461 million in 2020, then declined steadily to $23,044 million by the end of 2022. This decreasing trend corresponds with the reductions in both equity and debt earlier noted, possibly reflecting asset sales, depreciation, or less capital deployment during this period. In 2023, invested capital surged to $36,379 million, marking a significant expansion of the capital base, likely linked to the increased debt and equity levels recorded the same year.
Overall, the data indicates a phase of consolidation or capital reduction from 2020 to 2022, characterized by declines in debt, equity, and invested capital. This was followed by a strong growth phase in 2023, with marked increases across all major capital metrics. The simultaneous rise in debt and equity suggests an aggressive capital expansion, possibly to fund new investments or strategic initiatives. This shift in 2023 represents a significant change in the company's financial strategy compared to the prior years.
Cost of Capital
Newmont Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, finance lease and other financing obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt, finance lease and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, finance lease and other financing obligations3 | ÷ | = | × | × (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 Debt, finance lease and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, finance lease and other financing obligations3 | ÷ | = | × | × (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 Debt, finance lease and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, finance lease and other financing obligations3 | ÷ | = | × | × (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 Debt, finance lease and other financing obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, finance lease and other financing obligations3 | ÷ | = | × | × (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 Debt, finance lease and other financing obligations. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Newmont Corp., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Freeport-McMoRan Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The economic spread ratio demonstrates a consistently deteriorating trend over the five-year period. Initially positive, the ratio transitioned to negative values and experienced a substantial decline throughout the observed timeframe.
- Economic Spread Ratio
- In 2019, the economic spread ratio stood at 2.11%, indicating that the returns generated from invested capital exceeded the cost of that capital. However, this positive spread diminished significantly in 2020, becoming negative at -1.09%.
- The decline accelerated in subsequent years. The ratio reached -9.24% in 2021, -12.51% in 2022, and further deteriorated to -16.49% in 2023. This progression suggests a widening gap between the cost of capital and the returns generated by invested capital.
The economic profit mirrors the trend in the economic spread ratio, moving from a positive value of US$611 million in 2019 to a negative US$6,000 million in 2023. This indicates a decreasing ability to generate wealth above the cost of capital.
- Invested Capital
- Invested capital fluctuated over the period. It increased from US$28,943 million in 2019 to US$29,461 million in 2020, then decreased to US$27,566 million in 2021 and US$23,044 million in 2022. A notable increase occurred in 2023, reaching US$36,379 million. While invested capital increased in the most recent year, the economic spread ratio continued to worsen, suggesting the increase in capital did not translate into improved profitability relative to its cost.
The combined trends suggest a growing inefficiency in capital allocation. Despite an increase in invested capital in 2023, the company’s ability to generate returns exceeding its cost of capital continued to decline, as evidenced by the increasingly negative economic spread ratio and economic profit.
Economic Profit Margin
Newmont Corp., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Sales | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Freeport-McMoRan Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 Economic profit. See details »
2 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The economic profit margin exhibits a markedly declining trend over the five-year period. Initially positive, it transitioned to negative values and experienced a substantial decrease in magnitude throughout the observed timeframe.
- Economic Profit Margin
- In 2019, the economic profit margin stood at 6.27%. This indicates that for every dollar of sales, the company generated 6.27 cents of economic profit. However, this positive margin quickly reversed in 2020, falling to -2.80%.
- The decline accelerated significantly in subsequent years. The economic profit margin decreased to -20.84% in 2021 and further to -24.19% in 2022. This suggests a growing disparity between the company’s cost of capital and the returns generated from sales.
- By 2023, the economic profit margin reached -50.80%, representing a substantial deterioration in economic profitability. This indicates that the company’s returns are significantly lower than its cost of capital, resulting in a considerable economic loss for each dollar of sales.
The consistent negative trend in the economic profit margin, coupled with its increasing magnitude, suggests a weakening ability to generate returns exceeding the cost of capital. This warrants further investigation into the underlying factors contributing to this decline, such as changes in operational efficiency, capital structure, or competitive pressures.
- Relationship to Sales
- While sales increased from 2019 to 2021, the economic profit margin simultaneously decreased. This suggests that revenue growth alone was insufficient to offset rising costs or a higher cost of capital. Sales experienced a slight decrease in 2022 and remained relatively stable in 2023, coinciding with continued deterioration in the economic profit margin.
The substantial decline in economic profit margin from 2019 to 2023 indicates a significant shift in the company’s economic performance. The increasing negative values highlight a growing concern regarding the efficient allocation of capital and the generation of shareholder value.