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
Walt Disney Co., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 12,192 – 19.78% × 165,308 = -20,501
An analysis of the economic value added indicates a period of consistent value destruction, as economic profit remained negative throughout the observed timeframe. However, a progressive trend toward recovery is evident, characterized by a significant increase in operational profitability and a marginal reduction in the capital base.
- Net Operating Profit After Taxes (NOPAT)
- Operational profitability exhibited significant volatility followed by an aggressive growth trajectory. After a deficit of 2,176 million US$ in 2020, NOPAT transitioned to positive territory, reaching a peak of 12,192 million US$ by September 2025. Despite a temporary contraction in 2023, the overall trend reflects a substantial improvement in the ability to generate operating income.
- Invested Capital and Cost of Capital
- The invested capital base remained relatively stable between 2020 and 2023, hovering around 174,000 million US$, before experiencing a moderate decline to 165,308 million US$ by 2025. Simultaneously, the cost of capital remained high and relatively constant, fluctuating within a narrow range between 18.98% and 19.78%. This suggests a high hurdle rate that the organization must overcome to create economic value.
- Economic Profit Trajectory
- Economic profit remained negative for the entire duration, peaking in deficit at -35,576 million US$ in 2020. While the figure dipped again in 2023 to -30,112 million US$, the subsequent years showed a narrowing of this gap, ending at -20,501 million US$ in 2025. The narrowing deficit is primarily attributed to the growth in NOPAT rather than a significant reduction in the cost of capital or the invested capital base.
In summary, while the organization continues to operate below its cost of capital, the trend is positive. The substantial growth in NOPAT is effectively reducing the annual economic loss, suggesting an improvement in capital efficiency and a movement toward achieving a positive economic profit.
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Net Operating Profit after Taxes (NOPAT)
Walt Disney Co., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in deferred revenues.
4 Addition of increase (decrease) in restructuring reserves.
5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to The Walt Disney Company (Disney).
6 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 3,235 × 4.10% = 133
7 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,945 × 21.00% = 408
8 Addition of after taxes interest expense to net income (loss) attributable to The Walt Disney Company (Disney).
9 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 246 × 21.00% = 52
10 Elimination of after taxes investment income.
11 Elimination of discontinued operations.
- Net Income
- The net income attributable has demonstrated robust positive growth in the analyzed periods. Initially, a significant loss of -2864 million USD was recorded, followed by a turnaround to a profit of 1995 million USD in the subsequent period. Thereafter, a consistent upward trajectory is observed, culminating in a substantial net income of 12404 million USD by the latest period. This suggests a strong recovery and improving profitability.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT follows a similar pattern to net income, with an initial negative value of -2176 million USD. A major improvement is noted in the following period, progressing to positive values and showing an overall upward trend. Despite some fluctuations, NOPAT generally increases with peaks reaching 12192 million USD in the last reported period, indicating enhanced operational efficiency and profitability after tax considerations.
- Overall Trends and Insights
- The data reveals a significant financial turnaround from losses to strong profits over the annual periods. Both net income and NOPAT have shown marked improvements, reflecting successful operational and financial strategies. The consistent increase, especially noticeable in the most recent years, highlights improved business performance and effective management in generating shareholder value.
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Cash Operating Taxes
Walt Disney Co., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03).
The financial data reveals notable fluctuations in both income tax expense related to continuing operations and cash operating taxes over the observed periods.
- Income Tax Expense (Benefit) on Income from Continuing Operations
- This metric displays significant variability. It started at 699 million US dollars in 2020, sharply declined to 25 million in 2021, and then surged to 1,732 million in 2022. In the subsequent years, the value remained elevated at 1,379 million in 2023 and increased further to 1,796 million in 2024, followed by a substantial reversal to a negative figure of -1,428 million in 2025. The pronounced negative value in the final year suggests a tax benefit or credit, marking a distinct departure from previous years’ expenses.
- Cash Operating Taxes
- Cash operating taxes have generally increased over the years with some volatility. The amount rose from 1,305 million US dollars in 2020 to a peak of 3,100 million in 2023. Although there was a slight decline to 2,982 million in 2024, the value decreased more sharply to 1,546 million in 2025. This trend indicates a build-up of tax payments until 2023, with a marked reduction thereafter.
In summary, both income tax expense and cash operating taxes have seen considerable fluctuations, with the income tax expense showing a notable reversal into a benefit in the last recorded year and cash operating taxes peaking in 2023 before declining significantly. These trends may reflect changes in tax regulations, profitability, or tax strategies implemented in the latest periods.
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Invested Capital
Walt Disney Co., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03).
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 deferred revenues.
5 Addition of restructuring reserves.
6 Addition of equity equivalents to total Disney Shareholder’s equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of projects in progress.
9 Subtraction of investments recorded at fair value.
- Total reported debt & leases
-
The total reported debt and leases demonstrate a clear downward trend over the analyzed periods. Starting from approximately 62.3 billion USD, the figure consistently decreases each year, reaching around 45.4 billion USD by the latest period. This steady reduction in liabilities suggests a strategic effort towards deleveraging and improving the company’s financial stability by lowering its debt burden.
- Total Disney Shareholder’s equity
-
Shareholders' equity shows a consistent upward trajectory throughout the timeline. Beginning at about 83.6 billion USD, it rises continuously to nearly 110 billion USD in the most recent period. This growth in equity indicates strengthening net asset values, which could result from retained earnings, profitable operations, or potentially favorable revaluation adjustments. The increasing equity base enhances the company’s capacity to finance operations through internal sources.
- Invested capital
-
Invested capital remains relatively stable across the periods, fluctuating slightly between approximately 165.3 billion USD and 174.6 billion USD. However, a slight decline is observable in the latter part of the timeline, dropping from the peak near 174.6 billion to around 165.3 billion USD. This suggests a modest reduction in the total capital invested in the company's operations, possibly reflecting asset disposals, operational efficiencies, or capital allocation adjustments.
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Cost of Capital
Walt Disney Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 192,115) | 192,115) | ÷ | 234,599) | = | 0.82 | 0.82 | × | 23.38% | = | 19.14% | ||
| Borrowings and finance lease liabilities3 | 39,249) | 39,249) | ÷ | 234,599) | = | 0.17 | 0.17 | × | 4.45% × (1 – 21.00%) | = | 0.59% | ||
| Operating lease liability4 | 3,235) | 3,235) | ÷ | 234,599) | = | 0.01 | 0.01 | × | 4.10% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 234,599) | 1.00 | 19.78% | ||||||||||
Based on: 10-K (reporting date: 2025-09-27).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 197,610) | 197,610) | ÷ | 245,021) | = | 0.81 | 0.81 | × | 23.38% | = | 18.85% | ||
| Borrowings and finance lease liabilities3 | 43,899) | 43,899) | ÷ | 245,021) | = | 0.18 | 0.18 | × | 4.80% × (1 – 21.00%) | = | 0.68% | ||
| Operating lease liability4 | 3,512) | 3,512) | ÷ | 245,021) | = | 0.01 | 0.01 | × | 4.00% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 245,021) | 1.00 | 19.58% | ||||||||||
Based on: 10-K (reporting date: 2024-09-28).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 172,873) | 172,873) | ÷ | 218,570) | = | 0.79 | 0.79 | × | 23.38% | = | 18.49% | ||
| Borrowings and finance lease liabilities3 | 41,699) | 41,699) | ÷ | 218,570) | = | 0.19 | 0.19 | × | 4.96% × (1 – 21.00%) | = | 0.75% | ||
| Operating lease liability4 | 3,998) | 3,998) | ÷ | 218,570) | = | 0.02 | 0.02 | × | 3.60% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 218,570) | 1.00 | 19.29% | ||||||||||
Based on: 10-K (reporting date: 2023-09-30).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 172,676) | 172,676) | ÷ | 220,585) | = | 0.78 | 0.78 | × | 23.38% | = | 18.30% | ||
| Borrowings and finance lease liabilities3 | 44,275) | 44,275) | ÷ | 220,585) | = | 0.20 | 0.20 | × | 4.09% × (1 – 21.00%) | = | 0.65% | ||
| Operating lease liability4 | 3,634) | 3,634) | ÷ | 220,585) | = | 0.02 | 0.02 | × | 2.70% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 220,585) | 1.00 | 18.98% | ||||||||||
Based on: 10-K (reporting date: 2022-10-01).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 275,084) | 275,084) | ÷ | 339,315) | = | 0.81 | 0.81 | × | 23.38% | = | 18.95% | ||
| Borrowings and finance lease liabilities3 | 60,611) | 60,611) | ÷ | 339,315) | = | 0.18 | 0.18 | × | 3.04% × (1 – 21.00%) | = | 0.43% | ||
| Operating lease liability4 | 3,620) | 3,620) | ÷ | 339,315) | = | 0.01 | 0.01 | × | 2.40% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 339,315) | 1.00 | 19.40% | ||||||||||
Based on: 10-K (reporting date: 2021-10-02).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 269,925) | 269,925) | ÷ | 338,438) | = | 0.80 | 0.80 | × | 23.38% | = | 18.65% | ||
| Borrowings and finance lease liabilities3 | 65,126) | 65,126) | ÷ | 338,438) | = | 0.19 | 0.19 | × | 3.06% × (1 – 21.00%) | = | 0.47% | ||
| Operating lease liability4 | 3,387) | 3,387) | ÷ | 338,438) | = | 0.01 | 0.01 | × | 2.50% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 338,438) | 1.00 | 19.13% | ||||||||||
Based on: 10-K (reporting date: 2020-10-03).
1 US$ in millions
2 Equity. See details »
3 Borrowings and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Walt Disney Co., economic spread ratio calculation, comparison to benchmarks
| Sep 27, 2025 | Sep 28, 2024 | Sep 30, 2023 | Oct 1, 2022 | Oct 2, 2021 | Oct 3, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (20,501) | (26,254) | (30,112) | (26,329) | (31,337) | (35,576) | |
| Invested capital2 | 165,308) | 166,066) | 173,764) | 173,977) | 172,934) | 174,594) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -12.40% | -15.81% | -17.33% | -15.13% | -18.12% | -20.38% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Alphabet Inc. | 26.54% | 22.42% | 15.78% | 7.39% | 26.68% | — | |
| Comcast Corp. | 1.83% | -1.38% | -3.27% | -7.74% | -2.74% | — | |
| Meta Platforms Inc. | 16.71% | 13.86% | 6.77% | 0.52% | 22.81% | — | |
| Netflix Inc. | 1.00% | -3.69% | -9.95% | -10.48% | -5.88% | — | |
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -20,501 ÷ 165,308 = -12.40%
4 Click competitor name to see calculations.
Analysis of economic value generation indicates a persistent deficit in economic profit over the analyzed six-year period, although a consistent trend of recovery is evident. The narrowing of the economic spread ratio suggests an improving relationship between the return on invested capital and the cost of capital, despite the continued failure to achieve a positive economic spread.
- Economic Profit Trends
- Economic profit remained negative throughout the timeframe, with the most significant deficit recorded in 2020 at US$ -35,576 million. A trend of recovery was observed through 2022, followed by a temporary reversal in 2023 when losses widened to US$ -30,112 million. Subsequently, the deficit contracted further in 2024 and 2025, ending the period at US$ -20,501 million.
- Invested Capital Dynamics
- Invested capital demonstrated relative stability from 2020 to 2023, maintaining a range between US$ 172,934 million and US$ 174,594 million. A downward shift occurred starting in 2024, with invested capital decreasing to US$ 166,066 million and further declining to US$ 165,308 million by 2025, indicating a reduction in the total capital employed.
- Economic Spread Ratio Performance
- The economic spread ratio mirrored the movements of economic profit, remaining negative but trending upward over the long term. The ratio improved from -20.38% in 2020 to -12.40% in 2025. Although a deterioration was noted in 2023, where the ratio dropped to -17.33%, the subsequent recovery indicates a gradual closing of the gap between the actual return on capital and the required minimum return.
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Economic Profit Margin
Walt Disney Co., economic profit margin calculation, comparison to benchmarks
| Sep 27, 2025 | Sep 28, 2024 | Sep 30, 2023 | Oct 1, 2022 | Oct 2, 2021 | Oct 3, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (20,501) | (26,254) | (30,112) | (26,329) | (31,337) | (35,576) | |
| Revenues | 94,425) | 91,361) | 88,898) | 82,722) | 67,418) | 65,388) | |
| Add: Increase (decrease) in deferred revenues | 29) | (100) | 87) | 1,810) | 447) | (468) | |
| Adjusted revenues | 94,454) | 91,261) | 88,985) | 84,532) | 67,865) | 64,920) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -21.70% | -28.77% | -33.84% | -31.15% | -46.18% | -54.80% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Alphabet Inc. | 20.35% | 14.56% | 9.73% | 5.28% | 17.70% | — | |
| Comcast Corp. | 3.43% | -2.39% | -5.65% | -13.66% | -5.40% | — | |
| Meta Platforms Inc. | 17.94% | 13.98% | 7.09% | 0.46% | 17.92% | — | |
| Netflix Inc. | 0.97% | -3.84% | -11.13% | -12.50% | -6.87% | — | |
Based on: 10-K (reporting date: 2025-09-27), 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-10-01), 10-K (reporting date: 2021-10-02), 10-K (reporting date: 2020-10-03).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -20,501 ÷ 94,454 = -21.70%
3 Click competitor name to see calculations.
The financial trajectory between 2020 and 2025 is characterized by a consistent expansion in adjusted revenues and a general reduction in economic losses. While the company has remained in a state of negative economic profit throughout the period, there is a clear trend toward recovery and improved capital efficiency.
- Adjusted Revenue Growth
- A continuous upward trend in adjusted revenues is observed, growing from 64,920 million USD in 2020 to 94,454 million USD by 2025. This represents a steady increase in top-line performance, providing a broader base to recover economic value.
- Economic Profit Trends
- Economic profit has remained negative, indicating that the company's operating returns have not yet exceeded its cost of capital. However, the magnitude of these losses has decreased from 35,576 million USD in 2020 to 20,501 million USD in 2025. A temporary reversal occurred in 2023, where losses widened to 30,112 million USD from 26,329 million USD in the previous year, before returning to a downward trend in losses through 2025.
- Economic Profit Margin Analysis
- The economic profit margin shows a significant improvement over the six-year period, moving from -54.80% in 2020 to -21.70% in 2025. This indicates that the company is narrowing the gap between its current performance and the threshold of value creation. Similar to the absolute economic profit, the margin experienced a slight deterioration in 2023, shifting from -31.15% to -33.84%, but subsequently improved to its highest level in the analyzed period by 2025.
The convergence of increasing revenues and narrowing economic losses suggests an improving operational efficiency. The reduction in the economic profit margin's negativity confirms that the growth in revenue is contributing positively to the reduction of the economic deficit, despite the volatility observed in 2023.
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