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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Advanced Micro Devices Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 30, 2023	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019
Net operating profit after taxes (NOPAT)¹	(201)	(138)	3,517)	1,330)	409)
Cost of capital²	19.42%	19.25%	19.53%	19.49%	19.14%
Invested capital³	57,883)	58,525)	6,195)	4,364)	3,408)

Economic profit⁴	(11,444)	(11,403)	2,307)	479)	(243)

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

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
= -201 – 19.42% × 57,883 = -11,444

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Advanced Micro Devices Inc. economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Advanced Micro Devices Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 30, 2023	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019
Net income	854)	1,320)	3,162)	2,490)	341)
Deferred income tax expense (benefit)¹	(1,019)	(1,505)	308)	(1,223)	(7)
Increase (decrease) in liability for product warranty²	20)	14)	14)	22)	2)
Increase (decrease) in equity equivalents³	(999)	(1,491)	322)	(1,201)	(5)
Interest expense	106)	88)	34)	47)	94)
Interest expense, operating lease liability⁴	29)	19)	16)	13)	13)
Adjusted interest expense	135)	107)	50)	60)	107)
Tax benefit of interest expense⁵	(28)	(22)	(10)	(13)	(23)
Adjusted interest expense, after taxes⁶	107)	84)	39)	47)	85)
Interest income	(206)	(65)	(8)	(8)	(15)
Investment income, before taxes	(206)	(65)	(8)	(8)	(15)
Tax expense (benefit) of investment income⁷	43)	14)	2)	2)	3)
Investment income, after taxes⁸	(163)	(51)	(6)	(6)	(12)
Net operating profit after taxes (NOPAT)	(201)	(138)	3,517)	1,330)	409)

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in liability for product warranty.

³ Addition of increase (decrease) in equity equivalents to net income.

⁴ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 641 × 4.57% = 29

⁵ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 135 × 21.00% = 28

⁶ Addition of after taxes interest expense to net income.

⁷ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 206 × 21.00% = 43

⁸ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Advanced Micro Devices Inc. NOPAT decreased from 2021 to 2022 and from 2022 to 2023.

Advanced Micro Devices Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 30, 2023	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019
Income tax provision (benefit)	(346)	(122)	513)	(1,210)	31)
Less: Deferred income tax expense (benefit)	(1,019)	(1,505)	308)	(1,223)	(7)
Add: Tax savings from interest expense	28)	22)	10)	13)	23)
Less: Tax imposed on investment income	43)	14)	2)	2)	3)
Cash operating taxes	658)	1,392)	214)	24)	57)

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Advanced Micro Devices Inc. cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Advanced Micro Devices Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 30, 2023	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019
Current portion of long-term debt, net	751)	—)	312)	—)	—)
Long-term debt, net of current portion	1,717)	2,467)	1)	330)	486)
Operating lease liability¹	641)	489)	419)	242)	242)
Total reported debt & leases	3,109)	2,956)	732)	572)	728)
Stockholders’ equity	55,892)	54,750)	7,497)	5,837)	2,827)
Net deferred tax (assets) liabilities²	836)	1,876)	(919)	(1,234)	(11)
Liability for product warranty³	85)	65)	51)	37)	15)
Equity equivalents⁴	921)	1,941)	(868)	(1,197)	4)
Accumulated other comprehensive (income) loss, net of tax⁵	10)	41)	3)	(17)	—)
Adjusted stockholders’ equity	56,823)	56,732)	6,632)	4,623)	2,831)
Construction in progress⁶	(209)	(143)	(96)	(136)	(114)
Short-term investments⁷	(1,840)	(1,020)	(1,073)	(695)	(37)
Invested capital	57,883)	58,525)	6,195)	4,364)	3,408)

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of liability for product warranty.

⁴ Addition of equity equivalents to stockholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of construction in progress.

⁷ Subtraction of short-term investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Advanced Micro Devices Inc. invested capital increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Advanced Micro Devices Inc., cost of capital calculations

Dec 30, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	270,951)	270,951)	÷	273,963)	=	0.99	0.99	×	19.61%	=	19.39%
Debt³	2,371)	2,371)	÷	273,963)	=	0.01	0.01	×	3.26% × (1 – 21.00%)	=	0.02%
Operating lease liability⁴	641)	641)	÷	273,963)	=	0.00	0.00	×	4.57% × (1 – 21.00%)	=	0.01%
Total:	273,963)					1.00					19.42%

Based on: 10-K (reporting date: 2023-12-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	126,929)	126,929)	÷	129,699)	=	0.98	0.98	×	19.61%	=	19.19%
Debt³	2,281)	2,281)	÷	129,699)	=	0.02	0.02	×	3.26% × (1 – 21.00%)	=	0.05%
Operating lease liability⁴	489)	489)	÷	129,699)	=	0.00	0.00	×	3.83% × (1 – 21.00%)	=	0.01%
Total:	129,699)					1.00					19.25%

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 »

Dec 25, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	144,012)	144,012)	÷	144,772)	=	0.99	0.99	×	19.61%	=	19.51%
Debt³	341)	341)	÷	144,772)	=	0.00	0.00	×	7.50% × (1 – 21.00%)	=	0.01%
Operating lease liability⁴	419)	419)	÷	144,772)	=	0.00	0.00	×	3.70% × (1 – 21.00%)	=	0.01%
Total:	144,772)					1.00					19.53%

Based on: 10-K (reporting date: 2021-12-25).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 26, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	103,734)	103,734)	÷	104,618)	=	0.99	0.99	×	19.61%	=	19.44%
Debt³	642)	642)	÷	104,618)	=	0.01	0.01	×	7.54% × (1 – 21.00%)	=	0.04%
Operating lease liability⁴	242)	242)	÷	104,618)	=	0.00	0.00	×	5.29% × (1 – 21.00%)	=	0.01%
Total:	104,618)					1.00					19.49%

Based on: 10-K (reporting date: 2020-12-26).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 28, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	57,840)	57,840)	÷	59,905)	=	0.97	0.97	×	19.61%	=	18.93%
Debt³	1,823)	1,823)	÷	59,905)	=	0.03	0.03	×	7.68% × (1 – 21.00%)	=	0.18%
Operating lease liability⁴	242)	242)	÷	59,905)	=	0.00	0.00	×	5.55% × (1 – 21.00%)	=	0.02%
Total:	59,905)					1.00					19.14%

Based on: 10-K (reporting date: 2019-12-28).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Advanced Micro Devices Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 30, 2023	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(11,444)	(11,403)	2,307)	479)	(243)
Invested capital²	57,883)	58,525)	6,195)	4,364)	3,408)
Performance Ratio
Economic spread ratio³	-19.77%	-19.48%	37.24%	10.98%	-7.13%
Benchmarks
Economic Spread Ratio, Competitors⁴
Analog Devices Inc.	-7.17%	-8.53%	-11.80%	-6.84%	-5.30%
Applied Materials Inc.	18.56%	28.43%	23.95%	12.14%	11.77%
Broadcom Inc.	9.34%	7.78%	-1.59%	-7.12%	-6.82%
First Solar Inc.	2.34%	-1.28%	-7.08%	-12.76%	-18.22%
Intel Corp.	-13.49%	-7.05%	10.13%	15.79%	13.86%
KLA Corp.	24.56%	26.82%	15.46%	4.34%	5.85%
Lam Research Corp.	9.11%	23.99%	19.36%	3.42%	0.07%
Micron Technology Inc.	-26.44%	1.36%	-3.19%	-8.76%	1.42%
NVIDIA Corp.	-9.50%	32.71%	13.14%	-0.86%	59.74%
Qualcomm Inc.	3.74%	30.18%	27.59%	12.63%	14.01%
Texas Instruments Inc.	15.47%	36.13%	34.74%	29.89%	29.57%

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -11,444 ÷ 57,883 = -19.77%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Advanced Micro Devices Inc. economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Advanced Micro Devices Inc., economic profit margin calculation, comparison to benchmarks

	Dec 30, 2023	Dec 31, 2022	Dec 25, 2021	Dec 26, 2020	Dec 28, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(11,444)	(11,403)	2,307)	479)	(243)
Net revenue	22,680)	23,601)	16,434)	9,763)	6,731)
Performance Ratio
Economic profit margin²	-50.46%	-48.31%	14.04%	4.91%	-3.61%
Benchmarks
Economic Profit Margin, Competitors³
Analog Devices Inc.	-25.74%	-31.96%	-75.80%	-22.24%	-16.24%
Applied Materials Inc.	12.44%	16.42%	15.28%	9.24%	8.16%
Broadcom Inc.	16.35%	14.56%	-3.73%	-19.66%	-18.11%
First Solar Inc.	4.45%	-1.84%	-13.49%	-25.56%	-27.18%
Intel Corp.	-22.91%	-9.91%	11.34%	16.62%	15.53%
KLA Corp.	19.51%	22.68%	15.24%	4.86%	8.17%
Lam Research Corp.	8.00%	17.71%	15.62%	3.98%	0.07%
Micron Technology Inc.	-90.97%	2.32%	-5.33%	-17.28%	2.36%
NVIDIA Corp.	-7.51%	21.92%	10.27%	-1.12%	24.39%
Qualcomm Inc.	3.29%	20.10%	16.62%	9.53%	12.38%
Texas Instruments Inc.	19.94%	31.68%	31.08%	26.80%	24.79%

Based on: 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26), 10-K (reporting date: 2019-12-28).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenue
= 100 × -11,444 ÷ 22,680 = -50.46%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Advanced Micro Devices Inc. economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.

Advanced Micro Devices Inc. (NASDAQ:AMD)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin