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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

Broadcom Inc., economic profit calculation

US$ in millions

12 months ended:	Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Net operating profit after taxes (NOPAT)¹	11,075)	14,440)	12,892)	7,124)	3,161)	3,003)
Cost of capital²	14.39%	14.35%	13.58%	13.19%	12.46%	12.35%
Invested capital³	140,990)	62,670)	62,111)	64,649)	65,921)	60,032)

Economic profit⁴	(9,218)	5,446)	4,457)	(1,402)	(5,052)	(4,413)

Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).

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
= 11,075 – 14.39% × 140,990 = -9,218

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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.	Broadcom Inc. economic profit increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Broadcom Inc., NOPAT calculation

US$ in millions

12 months ended:	Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Net income	5,895)	14,082)	11,495)	6,736)	2,960)	2,724)
Deferred income tax expense (benefit)¹	1,965)	(501)	(45)	(997)	(1,082)	(787)
Increase (decrease) in allowances for doubtful accounts²	—)	—)	—)	—)	—)	—)
Increase (decrease) in restructuring liabilities³	117)	(4)	2)	(30)	(74)	86)
Increase (decrease) in equity equivalents⁴	2,082)	(505)	(43)	(1,027)	(1,156)	(701)
Interest expense	3,953)	1,622)	1,737)	1,885)	1,777)	1,444)
Interest expense, operating lease liability⁵	72)	16)	17)	21)	24)	24)
Adjusted interest expense	4,025)	1,638)	1,754)	1,906)	1,801)	1,468)
Tax benefit of interest expense⁶	(845)	(344)	(368)	(400)	(378)	(308)
Adjusted interest expense, after taxes⁷	3,180)	1,294)	1,385)	1,505)	1,423)	1,160)
(Gain) loss on marketable securities	12)	(11)	169)	(99)	(31)	(145)
Interest income	(461)	(535)	(100)	(16)	(53)	(98)
Investment income, before taxes	(449)	(546)	69)	(115)	(84)	(243)
Tax expense (benefit) of investment income⁸	94)	115)	(14)	24)	18)	51)
Investment income, after taxes⁹	(355)	(431)	55)	(91)	(66)	(192)
(Income) loss from discontinued operations, net of tax¹⁰	273)	—)	—)	—)	1)	12)
Net operating profit after taxes (NOPAT)	11,075)	14,440)	12,892)	7,124)	3,161)	3,003)

Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances for doubtful accounts.

³ Addition of increase (decrease) in restructuring liabilities.

⁴ Addition of increase (decrease) in equity equivalents to net income.

⁵ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,350 × 5.31% = 72

⁶ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 4,025 × 21.00% = 845

⁷ Addition of after taxes interest expense to net income.

⁸ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 449 × 21.00% = 94

⁹ Elimination of after taxes investment income.

¹⁰ Elimination of discontinued operations.

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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.	Broadcom Inc. NOPAT increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Broadcom Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Provision for (benefit from) income taxes	3,748)	1,015)	939)	29)	(518)	(510)
Less: Deferred income tax expense (benefit)	1,965)	(501)	(45)	(997)	(1,082)	(787)
Add: Tax savings from interest expense	845)	344)	368)	400)	378)	308)
Less: Tax imposed on investment income	94)	115)	(14)	24)	18)	51)
Cash operating taxes	2,534)	1,745)	1,367)	1,402)	925)	534)

Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).

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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.	Broadcom Inc. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

Broadcom Inc., invested capital calculation (financing approach)

US$ in millions

	Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Current portion of long-term debt	1,271)	1,608)	440)	290)	827)	2,787)
Long-term debt, excluding current portion	66,295)	37,621)	39,075)	39,440)	40,235)	30,011)
Operating lease liability¹	1,350)	419)	463)	543)	627)	649)
Total reported debt & leases	68,916)	39,648)	39,978)	40,273)	41,689)	33,447)
Stockholders’ equity	67,678)	23,988)	22,709)	24,962)	23,874)	24,941)
Net deferred tax (assets) liabilities²	4,541)	(698)	(573)	(668)	329)	1,481)
Allowances for doubtful accounts³	—)	—)	—)	—)	—)	—)
Restructuring liabilities⁴	119)	2)	6)	4)	34)	108)
Equity equivalents⁵	4,660)	(696)	(567)	(664)	363)	1,589)
Accumulated other comprehensive (income) loss, net of tax⁶	(207)	(207)	54)	116)	108)	140)
Adjusted stockholders’ equity	72,131)	23,085)	22,196)	24,414)	24,345)	26,670)
Construction in progress⁷	(57)	(63)	(63)	(38)	(113)	(85)
Invested capital	140,990)	62,670)	62,111)	64,649)	65,921)	60,032)

Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).

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 restructuring liabilities.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of construction in progress.

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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.	Broadcom Inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Broadcom Inc., cost of capital calculations

Nov 3, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,034,921)	1,034,921)	÷	1,101,293)	=	0.94	0.94	×	15.07%	=	14.16%
8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value	—)	—)	÷	1,101,293)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	65,022)	65,022)	÷	1,101,293)	=	0.06	0.06	×	4.80% × (1 – 21.00%)	=	0.22%
Operating lease liability⁴	1,350)	1,350)	÷	1,101,293)	=	0.00	0.00	×	5.31% × (1 – 21.00%)	=	0.01%
Total:	1,101,293)					1.00					14.39%

Based on: 10-K (reporting date: 2024-11-03).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 29, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	517,998)	517,998)	÷	551,598)	=	0.94	0.94	×	15.07%	=	14.15%
8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value	—)	—)	÷	551,598)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	33,181)	33,181)	÷	551,598)	=	0.06	0.06	×	4.11% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	419)	419)	÷	551,598)	=	0.00	0.00	×	3.90% × (1 – 21.00%)	=	0.00%
Total:	551,598)					1.00					14.35%

Based on: 10-K (reporting date: 2023-10-29).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 30, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	232,303)	232,303)	÷	265,780)	=	0.87	0.87	×	15.07%	=	13.17%
8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value	—)	—)	÷	265,780)	=	0.00	0.00	×	0.00%	=	0.00%
Debt³	33,014)	33,014)	÷	265,780)	=	0.12	0.12	×	4.10% × (1 – 21.00%)	=	0.40%
Operating lease liability⁴	463)	463)	÷	265,780)	=	0.00	0.00	×	3.60% × (1 – 21.00%)	=	0.00%
Total:	265,780)					1.00					13.58%

Based on: 10-K (reporting date: 2022-10-30).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	262,175)	262,175)	÷	312,819)	=	0.84	0.84	×	15.07%	=	12.63%
8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value	6,709)	6,709)	÷	312,819)	=	0.02	0.02	×	4.77%	=	0.10%
Debt³	43,392)	43,392)	÷	312,819)	=	0.14	0.14	×	4.09% × (1 – 21.00%)	=	0.45%
Operating lease liability⁴	543)	543)	÷	312,819)	=	0.00	0.00	×	3.78% × (1 – 21.00%)	=	0.01%
Total:	312,819)					1.00					13.19%

Based on: 10-K (reporting date: 2021-10-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Nov 1, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	176,758)	176,758)	÷	227,419)	=	0.78	0.78	×	15.07%	=	11.71%
8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value	4,760)	4,760)	÷	227,419)	=	0.02	0.02	×	6.72%	=	0.14%
Debt³	45,274)	45,274)	÷	227,419)	=	0.20	0.20	×	3.79% × (1 – 21.00%)	=	0.60%
Operating lease liability⁴	627)	627)	÷	227,419)	=	0.00	0.00	×	3.80% × (1 – 21.00%)	=	0.01%
Total:	227,419)					1.00					12.46%

Based on: 10-K (reporting date: 2020-11-01).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Nov 3, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	126,896)	126,896)	÷	165,529)	=	0.77	0.77	×	15.07%	=	11.55%
8.00% Mandatory Convertible Preferred Stock, Series A, $0.001 par value	4,332)	4,332)	÷	165,529)	=	0.03	0.03	×	7.39%	=	0.19%
Debt³	33,652)	33,652)	÷	165,529)	=	0.20	0.20	×	3.70% × (1 – 21.00%)	=	0.59%
Operating lease liability⁴	649)	649)	÷	165,529)	=	0.00	0.00	×	3.70% × (1 – 21.00%)	=	0.01%
Total:	165,529)					1.00					12.35%

Based on: 10-K (reporting date: 2019-11-03).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Broadcom Inc., economic spread ratio calculation, comparison to benchmarks

	Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(9,218)	5,446)	4,457)	(1,402)	(5,052)	(4,413)
Invested capital²	140,990)	62,670)	62,111)	64,649)	65,921)	60,032)
Performance Ratio
Economic spread ratio³	-6.54%	8.69%	7.18%	-2.17%	-7.66%	-7.35%
Benchmarks
Economic Spread Ratio, Competitors⁴
Advanced Micro Devices Inc.	—	-19.74%	-19.45%	37.27%	11.02%	-7.10%
Analog Devices Inc.	-11.46%	-7.38%	-8.74%	-12.00%	-7.04%	-5.50%
Applied Materials Inc.	10.22%	18.14%	28.02%	23.54%	11.74%	11.38%
Intel Corp.	—	-13.54%	-7.10%	10.07%	15.73%	13.80%
KLA Corp.	20.68%	24.54%	26.81%	15.45%	4.32%	5.84%
Lam Research Corp.	3.83%	9.13%	24.01%	19.38%	3.44%	0.08%
Micron Technology Inc.	-14.35%	-26.45%	1.35%	-3.20%	-8.77%	1.41%
Monolithic Power Systems Inc.	—	11.92%	18.00%	20.52%	9.40%	5.71%
NVIDIA Corp.	68.73%	-9.44%	32.76%	13.19%	-0.81%	59.79%
Qualcomm Inc.	11.33%	3.72%	30.16%	27.56%	12.60%	13.99%
Texas Instruments Inc.	—	15.40%	36.06%	34.68%	29.83%	29.51%

Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -9,218 ÷ 140,990 = -6.54%

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.	Broadcom Inc. economic spread ratio improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Broadcom Inc., economic profit margin calculation, comparison to benchmarks

	Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(9,218)	5,446)	4,457)	(1,402)	(5,052)	(4,413)
Net revenue	51,574)	35,819)	33,203)	27,450)	23,888)	22,597)
Performance Ratio
Economic profit margin²	-17.87%	15.20%	13.42%	-5.11%	-21.15%	-19.53%
Benchmarks
Economic Profit Margin, Competitors³
Advanced Micro Devices Inc.	—	-50.38%	-48.23%	14.05%	4.92%	-3.60%
Analog Devices Inc.	-52.90%	-26.49%	-32.75%	-77.13%	-22.89%	-16.84%
Applied Materials Inc.	8.33%	12.16%	16.18%	15.02%	8.93%	7.89%
Intel Corp.	—	-23.00%	-9.99%	11.28%	16.56%	15.46%
KLA Corp.	17.75%	19.50%	22.67%	15.23%	4.84%	8.15%
Lam Research Corp.	3.88%	8.01%	17.72%	15.63%	4.00%	0.09%
Micron Technology Inc.	-30.47%	-90.99%	2.31%	-5.35%	-17.29%	2.34%
Monolithic Power Systems Inc.	—	9.66%	12.36%	11.61%	7.07%	4.19%
NVIDIA Corp.	34.70%	-7.47%	21.96%	10.31%	-1.05%	24.41%
Qualcomm Inc.	8.98%	3.27%	20.09%	16.60%	9.51%	12.36%
Texas Instruments Inc.	—	19.86%	31.62%	31.02%	26.74%	24.73%

Based on: 10-K (reporting date: 2024-11-03), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-11-01), 10-K (reporting date: 2019-11-03).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenue
= 100 × -9,218 ÷ 51,574 = -17.87%

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.	Broadcom Inc. economic profit margin improved from 2022 to 2023 but then deteriorated significantly from 2023 to 2024.

Broadcom Inc. (NASDAQ:AVGO)

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