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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Pfizer Inc. pages available for free this week:
- Cash Flow Statement
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Economic Profit
Pfizer Inc., 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
= – × =
The financial data reveals significant fluctuations in the company's key performance indicators over the five-year period analyzed.
- Net Operating Profit After Taxes (NOPAT)
-
The NOPAT experienced a strong upward trend from 2020 to 2022, rising from 6,095 million US dollars to 31,018 million US dollars. However, in 2023, there was a sharp decline resulting in a negative value of -1,277 million US dollars. The figure partially recovered in 2024 to 7,374 million US dollars but remained well below the peak observed in 2022.
- Cost of Capital
-
The cost of capital showed a modest increase from 9.46% in 2020 to a peak of 10.11% in 2022, followed by a decrease to 8.72% in 2023. In 2024, the cost of capital rose slightly again to 8.88%. This fluctuation indicates varying market or risk conditions impacting the company's financing cost during this period.
- Invested Capital
-
The invested capital initially decreased from 103,898 million US dollars in 2020 to 87,670 million US dollars in 2021. Subsequently, it increased markedly to 110,746 million US dollars in 2022 and surged further to 154,882 million US dollars in 2023. In 2024, invested capital decreased to 135,777 million US dollars, indicating some retraction but remaining significantly above earlier years.
- Economic Profit
-
The economic profit followed a pattern similar to NOPAT. It started at a negative 3,733 million US dollars in 2020, improved to a positive 9,705 million US dollars in 2021, and further increased to 19,819 million US dollars in 2022. In 2023, economic profit declined sharply to -14,775 million US dollars, reflecting a substantial loss in value creation, and improved slightly in 2024 to -4,682 million US dollars but remained negative.
In summary, the company demonstrated strong profitability and value creation up until 2022, followed by a pronounced downturn in 2023 impacting both operating profit and economic profit negatively. Invested capital showed significant volatility, with a notable increase in financing or assets deployed in 2023. The cost of capital movements suggest changing capital market conditions through the years. The recovery attempts in 2024, while present, did not restore profitability or economic profit to prior peak levels, indicating challenges in operational efficiency or market environment post-2022.
Net Operating Profit after Taxes (NOPAT)
Pfizer Inc., 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 allowance for doubtful accounts.
3 Addition of increase (decrease) in restructuring accruals.
4 Addition of increase (decrease) in equity equivalents to net income attributable to Pfizer Inc. common shareholders.
5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income attributable to Pfizer Inc. common shareholders.
8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
10 Elimination of discontinued operations.
The financial data reveals notable fluctuations in profitability measures over the five-year period under review. Both net income attributable to common shareholders and net operating profit after taxes (NOPAT) exhibit significant variability, indicating shifts in operational efficiency and overall financial performance.
- Net Income Attributable to Pfizer Inc. Common Shareholders
- The net income increased substantially from 9,616 million USD in 2020 to a peak of 31,372 million USD in 2022. This growth signals a period of heightened profitability. However, the figure declined sharply to 2,119 million USD in 2023, representing a significant downturn. The net income rebounded in 2024 to 8,031 million USD, yet remained well below the peak levels observed in 2021 and 2022.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT followed a similar trajectory as net income. It rose from 6,095 million USD in 2020 to a maximum of 31,018 million USD in 2022, demonstrating improved operational performance and effective tax management during this period. In 2023, NOPAT turned negative to -1,277 million USD, reflecting operational challenges and possibly extraordinary items impacting profitability. The measure recovered moderately in 2024, reaching 7,374 million USD, yet still significantly lower compared to the peak years.
Overall, the data indicates a strong growth trend in profitability through 2022, followed by a pronounced decline in 2023, and a partial recovery in 2024. The volatile pattern suggests the presence of external or internal factors causing fluctuations in earnings and operating profitability, which could merit further investigation to understand the underlying drivers and sustainability of recent earnings levels.
Cash Operating Taxes
Pfizer Inc., 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).
- Provision (benefit) for taxes on income
- The provision for taxes on income demonstrated significant volatility over the observed periods. Initially, it increased notably from 477 million USD in 2020 to a peak of 3,328 million USD in 2022. Subsequently, it shifted to a negative value, indicating a tax benefit, with -1,115 million USD recorded in 2023, followed by a marginal negative provision of -28 million USD in 2024. This pattern suggests a possible influence of tax credits, adjustments, or one-time events impacting the effective tax expense.
- Cash operating taxes
- Cash operating taxes exhibited a rising trend from 2,090 million USD in 2020 to a peak of 7,967 million USD in 2022. After reaching this high point, there was a pronounced decline to 2,113 million USD in 2023. The figure modestly increased again to 2,426 million USD in 2024. This fluctuation indicates variability in the company’s cash tax obligations, potentially reflecting changes in taxable income, tax planning strategies, or timing differences in tax payments.
Invested Capital
Pfizer Inc., 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 allowance for doubtful accounts receivable.
4 Addition of restructuring accruals.
5 Addition of equity equivalents to total Pfizer Inc. shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable securities.
The data reveals significant fluctuations across the reported financial items over the five-year period from 2020 to 2024.
- Total reported debt & leases
-
This figure remained relatively stable between 2020 and 2022, with values around 41,000 million US dollars. However, it increased substantially in 2023 to over 75,000 million US dollars, representing almost a doubling compared to the previous year. In 2024, there was a decrease to approximately 67,000 million US dollars, though this figure remained markedly higher than the levels seen from 2020 to 2022.
- Total Pfizer Inc. shareholders’ equity
-
Shareholders’ equity exhibited a generally increasing trend from 63,238 million US dollars in 2020, rising steadily to a peak of 95,661 million US dollars in 2022. Following this apex, the equity declined moderately in the succeeding two years, reaching 88,203 million US dollars by the end of 2024. Despite the decrease post-2022, the equity values in 2023 and 2024 remained higher than the initial 2020 level.
- Invested capital
-
Invested capital presents a more volatile trend. Starting at 103,898 million US dollars in 2020, it decreased to 87,670 million US dollars in 2021, indicating a contraction. This was followed by a substantial increase in 2022 to 110,746 million US dollars and an even sharper rise in 2023 to 154,882 million US dollars. By 2024, invested capital receded to 135,777 million US dollars but remained significantly above the 2020 level.
Overall, the data highlights a phase of increased leverage in 2023, as reflected by the sharp rise in total reported debt and leases, coupled with a significant buildup of invested capital during the same period. Shareholders’ equity expanded robustly through 2022, peaking before experiencing moderate declines, suggesting possible distribution of earnings or adjustments in retained earnings. The trends indicate dynamic financial management actions influencing capital structure and investment intensity, especially from 2022 through 2024.
Cost of Capital
Pfizer Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 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 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| 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 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Pfizer Inc., 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 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
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 exhibited significant volatility over the five-year period. It started with a negative value of -3,733 million US dollars in 2020 and improved substantially to positive figures in 2021 and 2022, reaching a peak of 19,819 million US dollars in 2022. However, the trend reversed sharply in the final two years, declining into negative territory again with -14,775 million in 2023 and -4,682 million in 2024. This fluctuation highlights periods of both strong value creation and substantial economic losses within the given timeframe.
- Invested Capital
- Invested capital demonstrated an overall increasing trend from 2020 to 2023, starting at 103,898 million US dollars in 2020 and rising to a high of 154,882 million US dollars in 2023. In 2024, this amount decreased to 135,777 million US dollars, indicating a modest reduction but still a level notably higher than the initial years. The increase in invested capital suggests growth or expansion activity until 2023 followed by some capital divestment or asset reduction in the final year.
- Economic Spread Ratio
- The economic spread ratio, which reflects the difference between return on invested capital and cost of capital, followed a pattern similar to economic profit. It started negatively at -3.59% in 2020, then improved substantially to positive values of 11.07% in 2021 and 17.9% in 2022. Subsequently, the ratio declined sharply into negative territory again at -9.54% in 2023 and slightly improved but still negative at -3.45% in 2024. This pattern indicates fluctuations in profitability efficiency relative to the cost of capital, correlating with the swings seen in economic profit over the period analyzed.
Economic Profit Margin
Pfizer Inc., 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 | ||||||
| Revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
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 ÷ Revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Revenues
- Revenues show a strong upward trend from 2020 to 2022, increasing significantly from 42,678 million US dollars in 2020 to 101,175 million US dollars in 2022. However, there is a marked decline in revenues in 2023, dropping to 59,553 million US dollars, followed by a slight recovery to 63,627 million US dollars in 2024.
- Economic Profit
- The economic profit exhibits considerable volatility over the analyzed period. In 2020, the economic profit was negative at -3,733 million US dollars, then shifted to strong positive values in 2021 and 2022, reaching a peak of 19,819 million US dollars in 2022. This positive trend reverses sharply in 2023 with a significant negative value of -14,775 million US dollars, and it improves but remains negative at -4,682 million US dollars in 2024.
- Economic Profit Margin
- The economic profit margin mirrors the economic profit trend, starting at a negative margin of -8.75% in 2020 and improving substantially to positive margins of 11.81% and 19.59% in 2021 and 2022 respectively. In 2023, the margin declines dramatically to -24.81%, indicating a substantial loss relative to revenues, and though it recovers somewhat in 2024, it remains negative at -7.36%.
- Overall Analysis
- The data reveals a pattern of rapid growth in revenue and economic profitability through 2021 and 2022. This period is marked by achieving positive and increasing economic profit margins, suggesting effective operational performance or favorable market conditions during these years. However, the situation deteriorates sharply in 2023, with both revenues and economic profits declining markedly, resulting in significant negative economic profit margins, signaling operational challenges or increased costs that outweighed revenue generation. While 2024 shows a slight improvement from the previous year, both revenue and economic profit margin remain subdued compared to the peak years, indicating ongoing difficulties or a period of adjustment. This volatility underscores the importance of investigating underlying causes, such as market dynamics, cost structure changes, or strategic decisions, to better understand the financial performance fluctuation.