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 – 19.92% × 165,308 = -20,732
The financial trajectory from 2020 to 2025 indicates a period of operational recovery characterized by significant growth in operating profits, although the company consistently fails to generate positive economic value. While net operating profits have rebounded and expanded, they remain insufficient to cover the high cost of capital applied to the invested capital base, resulting in persistent economic losses.
- Net Operating Profit After Taxes (NOPAT)
- A strong upward trend is observed in NOPAT, moving from a deficit of US$ 2,176 million in 2020 to a projected US$ 12,192 million by 2025. Although a temporary contraction occurred in 2023, the overall trajectory shows a substantial increase in the company's ability to generate operating income after taxes.
- Cost of Capital
- The cost of capital has remained remarkably stable throughout the period, fluctuating within a narrow band between 19.12% and 19.92%. This consistency suggests a steady risk profile and a constant expectation of return from investors and creditors.
- Invested Capital
- Invested capital shows a gradual decline, decreasing from US$ 174,594 million in 2020 to US$ 165,308 million in 2025. This downward trend suggests a strategic reduction in the asset base or an optimization of capital deployment over the six-year period.
- Economic Profit
- Economic profit remains negative across all observed years, indicating that the company is not earning enough to cover its cost of capital. However, the magnitude of this value destruction is narrowing; economic losses improved from US$ 35,814 million in 2020 to US$ 20,732 million in 2025. The narrowing gap is driven primarily by the growth in NOPAT and the slight reduction in invested capital, although the company has yet to reach a break-even point in terms of economic value added.
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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 | × | 23.55% | = | 19.28% | ||
| 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 | 19.92% | ||||||||||
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 | × | 23.55% | = | 18.99% | ||
| 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 | 19.72% | ||||||||||
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 | × | 23.55% | = | 18.63% | ||
| 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 | 19.42% | ||||||||||
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 | × | 23.55% | = | 18.43% | ||
| 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 | 19.12% | ||||||||||
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 | × | 23.55% | = | 19.09% | ||
| 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 | 19.54% | ||||||||||
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 | × | 23.55% | = | 18.78% | ||
| 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 | 19.27% | ||||||||||
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 | (20,732) | (26,483) | (30,347) | (26,561) | (31,576) | (35,814) | |
| Invested capital2 | 165,308) | 166,066) | 173,764) | 173,977) | 172,934) | 174,594) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -12.54% | -15.95% | -17.46% | -15.27% | -18.26% | -20.51% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Alphabet Inc. | 26.50% | 22.38% | 15.74% | 7.35% | 26.64% | — | |
| AppLovin Corp. | 28.42% | 0.70% | -20.45% | -26.69% | -30.02% | — | |
| Comcast Corp. | 1.86% | -1.34% | -3.23% | -7.70% | -2.70% | — | |
| Meta Platforms Inc. | 16.62% | 13.77% | 6.68% | 0.43% | 22.71% | — | |
| Netflix Inc. | 0.78% | -3.92% | -10.17% | -10.70% | -6.10% | — | |
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 × -20,732 ÷ 165,308 = -12.54%
4 Click competitor name to see calculations.
The financial performance regarding economic value added indicates a sustained period of value destruction, as economic profit remained negative throughout the analyzed period. Despite this, a general trend of recovery is evident, characterized by a steady reduction in the magnitude of economic losses and an improving economic spread ratio.
- Economic Profit Trends
- Economic profit remained negative from 2020 through 2025, signifying that the returns generated were insufficient to cover the cost of invested capital. A significant improvement is noted from the 2020 low of -35,814 million US$ to the 2025 value of -20,732 million US$. A temporary reversal of this positive trend occurred in 2023, where losses widened to -30,347 million US$ from -26,561 million US$ in the previous year, before resuming a downward trajectory in losses through 2025.
- Invested Capital Dynamics
- Invested capital remained relatively stable between 2020 and 2023, fluctuating within a narrow range around 173,000 to 174,000 million US$. A notable contraction began in 2024, with invested capital decreasing to 166,066 million US$, and further declining to 165,308 million US$ by 2025. This reduction in the capital base contributes to the overall improvement in the economic spread ratio.
- Economic Spread Ratio Analysis
- The economic spread ratio, which measures the difference between the return on invested capital and the cost of capital, shows a consistent upward trajectory toward the zero-percent break-even point. The ratio improved from -20.51% in 2020 to -12.54% in 2025. Similar to the economic profit, the spread ratio experienced a setback in 2023, dropping to -17.46% from -15.27% in 2022. The subsequent recovery to -12.54% by 2025 suggests an increase in capital efficiency and a narrowing gap between generated returns and the required cost of capital.
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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 | (20,732) | (26,483) | (30,347) | (26,561) | (31,576) | (35,814) | |
| 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 | -21.95% | -29.02% | -34.10% | -31.42% | -46.53% | -55.17% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Alphabet Inc. | 20.31% | 14.53% | 9.70% | 5.25% | 17.67% | — | |
| AppLovin Corp. | 29.21% | 0.68% | -27.99% | -49.97% | -60.11% | — | |
| Comcast Corp. | 3.49% | -2.33% | -5.58% | -13.59% | -5.32% | — | |
| Meta Platforms Inc. | 17.84% | 13.88% | 6.99% | 0.38% | 17.84% | — | |
| Netflix Inc. | 0.75% | -4.08% | -11.38% | -12.76% | -7.12% | — | |
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 × -20,732 ÷ 94,454 = -21.95%
3 Click competitor name to see calculations.
An analysis of the financial performance between October 2020 and September 2025 reveals a consistent trend toward the recovery of economic value, characterized by a narrowing of economic losses and steady revenue expansion.
- Adjusted Revenue Growth
- A continuous upward trajectory in adjusted revenues is observed, increasing from 64,920 million US dollars in 2020 to 94,454 million US dollars by 2025. This steady growth indicates a consistent expansion of the top line over the six-year period.
- Economic Profit Trends
- Economic profit remained negative throughout the analyzed period, yet showed a general trend of improvement. The economic loss peaked at 35,814 million US dollars in 2020 and improved to 26,561 million US dollars by 2022. Despite a temporary setback in 2023, where losses widened to 30,347 million US dollars, the trend resumed its recovery, reaching the lowest loss level of 20,732 million US dollars in 2025.
- Economic Profit Margin Performance
- The economic profit margin demonstrates a significant recovery, moving from -55.17% in 2020 to -21.95% in 2025. This improvement reflects an increased efficiency in generating returns relative to the cost of capital. While the margin experienced a slight deterioration in 2023 to -34.10%, the subsequent years showed a strong rebound, indicating that the company is progressively closing the gap toward achieving positive economic value added.
Overall, the data indicates that while the organization has not yet reached a positive economic profit, the combination of rising revenues and reducing economic losses has resulted in a substantial improvement in the economic profit margin over the observed timeframe.
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