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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	15.50%	15.46%	14.61%	14.18%	13.38%	13.26%
Invested capital³	140,990)	62,670)	62,111)	64,649)	65,921)	60,032)

Economic profit⁴	(10,779)	4,752)	3,817)	(2,041)	(5,656)	(4,955)

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 – 15.50% × 140,990 = -10,779

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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.

The financial data reveals significant variability in the company's profitability over the analyzed periods.

Net Income: There is a general upward trend in net income from 2019 through 2023, increasing from 2,724 million US dollars to a peak of 14,082 million US dollars in 2023. However, in the most recent period ending November 3, 2024, net income has sharply declined to 5,895 million US dollars. This pattern suggests that while the company experienced strong growth in profitability over the four years, the latest year indicates a substantial reduction in net earnings.
Net Operating Profit After Taxes (NOPAT): NOPAT follows a similar trajectory, rising steadily from 3,003 million US dollars in 2019 to a high of 14,440 million US dollars in 2023. The data for 2024 shows a decrease to 11,075 million US dollars. Although this represents a fall compared to the prior year, the operating profit after taxes remains at an elevated level relative to the initial years, indicating that the company maintains strong core profitability despite the recent decline.

Overall, the company demonstrated impressive growth in both net income and operating profit from 2019 through 2023, reaching substantial earnings highs in the 2023 period. The subsequent decrease in 2024, particularly notable in net income, may warrant further investigation to understand underlying causes such as market conditions, operational challenges, or one-time events affecting profitability. Regardless, the sustained high NOPAT level in 2024 compared to earlier years indicates ongoing operational strength.

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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).

Provision for (benefit from) income taxes: The provision for income taxes shows a significant upward trend over the reported periods. Initially, there were negative values indicating a tax benefit, with -$510 million in 2019 and -$518 million in 2020. Starting from 2021, the provision shifted to positive values, recording $29 million in 2021, followed by a substantial increase to $939 million in 2022. This upward trajectory continued with $1,015 million in 2023 and further surged to $3,748 million in 2024. This pattern suggests a major change in tax expense recognition or profitability leading to higher tax provisions in recent years.
Cash operating taxes: Cash operating taxes exhibit a consistent and pronounced increase throughout the periods reviewed. The amount rose from $534 million in 2019 to $925 million in 2020. This upward movement continued steadily to $1,402 million in 2021 and remained relatively stable at $1,367 million in 2022. More recently, the figure increased to $1,745 million in 2023 and further escalated significantly to $2,534 million in 2024. This trend reflects growing cash outflows for tax payments, possibly associated with higher taxable income or changes in tax regulations.

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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.

Total reported debt & leases: The total reported debt and leases showed an increasing trend from 33,447 million USD in 2019 to 41,689 million USD in 2020. It then slightly decreased over the next three years, reaching 39,648 million USD in 2023. However, in 2024, there was a significant jump to 68,916 million USD, nearly doubling compared to the previous year. This sharp increase suggests a substantial rise in borrowing or lease obligations in the most recent period.
Stockholders’ equity: Stockholders' equity fluctuated modestly between 24,941 million USD in 2019 and 23,874 million USD in 2020, followed by a recovery to 24,962 million USD in 2021. Thereafter, it declined again to a low of 22,709 million USD in 2022, before slightly increasing to 23,988 million USD in 2023. A notable increase occurred in 2024, with equity rising sharply to 67,678 million USD. This surge aligns with the pattern of increased invested capital and may indicate equity financing or revaluation effects during the period.
Invested capital: Invested capital displayed a steady increase from 60,032 million USD in 2019 to a peak of 65,921 million USD in 2020, followed by a minor decline to 62,670 million USD in 2023. A dramatic rise in invested capital was observed in 2024, reaching 140,990 million USD, more than doubling the prior year value. This significant growth suggests substantial investment activities or acquisitions, possibly funded by the increased debt and equity seen in the same period.
Overall analysis: The financial data reveals relative stability in debt, equity, and invested capital from 2019 through 2023, with moderate fluctuations. The year 2024, however, marked a considerable shift characterized by sharp increases in all three key metrics: debt, equity, and invested capital. The simultaneous escalation of these figures points to a major capital restructuring, expansion, or acquisition event during this period. Such changes warrant further investigation to understand the underlying drivers and implications for financial risk and company strategy.

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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	×	16.25%	=	15.27%
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					15.50%

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	×	16.25%	=	15.26%
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					15.46%

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	×	16.25%	=	14.20%
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					14.61%

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	×	16.25%	=	13.62%
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					14.18%

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	×	16.25%	=	12.63%
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					13.38%

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	×	16.25%	=	12.46%
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					13.26%

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	(10,779)	4,752)	3,817)	(2,041)	(5,656)	(4,955)
Invested capital²	140,990)	62,670)	62,111)	64,649)	65,921)	60,032)
Performance Ratio
Economic spread ratio³	-7.64%	7.58%	6.15%	-3.16%	-8.58%	-8.25%
Benchmarks
Economic Spread Ratio, Competitors⁴
Advanced Micro Devices Inc.	-20.46%	-21.88%	-21.57%	35.11%	8.87%	—
Analog Devices Inc.	-12.60%	-8.51%	-9.88%	-13.13%	-8.13%	-6.56%
Applied Materials Inc.	8.52%	16.43%	26.34%	21.85%	10.10%	9.78%
Intel Corp.	-25.84%	-14.85%	-8.34%	8.72%	14.34%	—
KLA Corp.	20.20%	24.07%	26.35%	14.97%	3.87%	—
Lam Research Corp.	2.63%	7.94%	22.85%	18.21%	2.33%	—
Micron Technology Inc.	-15.70%	-27.74%	-0.01%	-4.58%	-10.09%	0.09%
NVIDIA Corp.	67.19%	-10.97%	31.24%	11.68%	-2.34%	—
Qualcomm Inc.	10.06%	2.50%	28.94%	26.34%	11.39%	12.83%
Texas Instruments Inc.	5.44%	15.07%	35.72%	34.34%	29.48%	—

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 × -10,779 ÷ 140,990 = -7.64%

⁴ Click competitor name to see calculations.

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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	(10,779)	4,752)	3,817)	(2,041)	(5,656)	(4,955)
Net revenue	51,574)	35,819)	33,203)	27,450)	23,888)	22,597)
Performance Ratio
Economic profit margin²	-20.90%	13.27%	11.50%	-7.43%	-23.68%	-21.93%
Benchmarks
Economic Profit Margin, Competitors³
Advanced Micro Devices Inc.	-46.20%	-55.85%	-53.50%	13.24%	3.96%	—
Analog Devices Inc.	-58.16%	-30.57%	-37.01%	-84.36%	-26.42%	-20.08%
Applied Materials Inc.	6.94%	11.01%	15.21%	13.94%	7.68%	6.78%
Intel Corp.	-44.91%	-25.21%	-11.72%	9.76%	15.09%	—
KLA Corp.	17.33%	19.12%	22.28%	14.75%	4.33%	—
Lam Research Corp.	2.67%	6.97%	16.87%	14.69%	2.72%	—
Micron Technology Inc.	-33.34%	-95.44%	-0.01%	-7.66%	-19.92%	0.14%
NVIDIA Corp.	33.92%	-8.68%	20.94%	9.13%	-3.03%	—
Qualcomm Inc.	7.98%	2.20%	19.27%	15.86%	8.59%	11.33%
Texas Instruments Inc.	9.10%	19.43%	31.32%	30.71%	26.43%	—

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 × -10,779 ÷ 51,574 = -20.90%

³ Click competitor name to see calculations.

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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