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
Meta Platforms Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
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
= 79,619 – 20.14% × 216,060 = 36,110
An analysis of economic value creation reveals a period of significant volatility followed by a strong recovery and growth phase. Economic profit experienced a sharp contraction in 2022 before expanding consistently through 2025, indicating a return to substantial value creation above the cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a substantial decline in 2022, falling from 40,147 million US$ to 20,828 million US$. However, a robust upward trajectory followed, with profits increasing to 38,290 million US$ in 2023 and reaching 79,619 million US$ by 2025. This trajectory suggests a strong recovery in operational profitability and scale.
- Invested Capital
- A consistent upward trend is observed in invested capital, which rose from 92,809 million US$ in 2021 to 216,060 million US$ in 2025. This steady increase indicates a continuous commitment to capital expenditure and asset growth to support long-term operational goals.
- Cost of Capital
- The cost of capital remained relatively stable throughout the analyzed period, fluctuating narrowly between a low of 19.94% in 2022 and a high of 20.45% in 2021. This stability implies that the weighted average cost of funding and the associated risk profile remained constant despite changes in operational performance.
- Economic Profit
- Economic profit nearly reached a break-even point in 2022, dropping to 533 million US$ due to the simultaneous decrease in NOPAT and increase in invested capital. Subsequent years show a rapid acceleration in value creation, with economic profit climbing to 36,110 million US$ by 2025. This growth confirms that the returns generated from the expanded capital base have significantly outpaced the cost of that capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Net Operating Profit after Taxes (NOPAT)
Meta Platforms Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in deferred revenue.
3 Addition of increase (decrease) in accrued severance and other personnel liabilities.
4 Addition of increase (decrease) in equity equivalents to net income.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 25,153 × 4.30% = 1,082
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 2,247 × 21.00% = 472
7 Addition of after taxes interest expense to net income.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 2,123 × 21.00% = 446
9 Elimination of after taxes investment income.
Net operating profit after taxes (NOPAT) exhibited considerable fluctuation over the five-year period. While net income experienced its own volatility, the NOPAT figures demonstrate a distinct pattern of decline followed by substantial recovery and growth.
- Overall Trend
- NOPAT decreased significantly from 2021 to 2022, then demonstrated a recovery in 2023. This recovery accelerated through 2024 and 2025, culminating in a substantial increase by the end of the period. The 2025 NOPAT value is nearly double that of 2021.
- 2021 to 2022
- A marked decrease in NOPAT is observed between 2021 and 2022, falling from US$40,147 million to US$20,828 million. This represents a substantial contraction, indicating a significant change in operational profitability after accounting for taxes. This decline outpaced the decrease in net income during the same period.
- 2022 to 2023
- The period from 2022 to 2023 shows a recovery in NOPAT, increasing to US$38,290 million. While not fully restoring the 2021 level, this represents a considerable improvement and suggests a stabilization of operational performance.
- 2023 to 2025
- Continued growth in NOPAT is evident from 2023 to 2025. NOPAT increased to US$56,844 million in 2024 and further to US$79,619 million in 2025. This sustained upward trend suggests improving operational efficiency and/or increased revenue generation, exceeding the growth rate observed in net income.
- Relationship to Net Income
- While both net income and NOPAT fluctuate, NOPAT appears to be a more sensitive indicator of core operational performance. The larger percentage decline in NOPAT from 2021 to 2022, compared to net income, suggests that factors beyond net income, such as changes in operating expenses or tax impacts, significantly influenced profitability. The accelerated growth in NOPAT from 2023 to 2025, exceeding the growth in net income, indicates a strengthening of core operational profitability.
In summary, the NOPAT figures reveal a period of initial decline followed by a robust recovery and substantial growth, indicating a positive trajectory in underlying operational profitability.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Cash Operating Taxes
Meta Platforms Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The provision for income taxes and cash operating taxes exhibited distinct patterns over the five-year period. While the provision for income taxes generally increased, the cash operating taxes demonstrated more volatility.
- Provision for Income Taxes
- The provision for income taxes decreased from US$7,914 million in 2021 to US$5,619 million in 2022, representing a substantial decline. It then increased to US$8,330 million in 2023 and remained relatively stable at US$8,303 million in 2024. A significant surge is observed in 2025, reaching US$25,474 million. This final year increase is markedly higher than any prior value in the observed period.
- Cash Operating Taxes
- Cash operating taxes increased from US$7,290 million in 2021 to US$8,950 million in 2022. A slight decrease occurred in 2023, with the value falling to US$8,095 million. The year 2024 saw a considerable increase to US$12,827 million. However, in 2025, cash operating taxes decreased significantly to US$6,745 million.
A notable divergence between the provision for income taxes and cash operating taxes is apparent, particularly in 2025. While the provision for income taxes experienced a large increase, cash operating taxes decreased. This suggests a potential shift in the timing of tax payments or the utilization of tax credits or loss carryforwards. The increase in provision for income taxes in 2025, coupled with the decrease in cash operating taxes, warrants further investigation to understand the underlying reasons for this discrepancy.
The volatility in cash operating taxes, especially the fluctuations between 2023, 2024, and 2025, indicates potential impacts from changes in tax laws, accounting adjustments, or strategic tax planning initiatives. The overall trend in the provision for income taxes suggests a growing tax burden, although the 2022 decrease and the 2025 spike require further scrutiny.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Invested Capital
Meta Platforms Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of deferred revenue.
4 Addition of accrued severance and other personnel liabilities.
5 Addition of equity equivalents to stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable securities.
The reported invested capital demonstrates a consistent upward trend over the five-year period. Simultaneously, both total reported debt & leases and stockholders’ equity have increased, contributing to the growth in invested capital.
- Invested Capital Trend
- Invested capital increased from US$92,809 million in 2021 to US$216,060 million in 2025. This represents a cumulative increase of 132.8% over the period. The rate of increase appears to be accelerating, with larger absolute increases observed in later years.
- Debt & Leases
- Total reported debt & leases exhibited substantial growth, rising from US$14,454 million in 2021 to US$85,081 million in 2025. This signifies a significant reliance on debt financing, with the most substantial increase occurring between 2023 and 2025. The growth rate of debt & leases consistently outpaced that of stockholders’ equity.
- Stockholders’ Equity
- Stockholders’ equity also increased, moving from US$124,879 million in 2021 to US$217,243 million in 2025. While positive, the growth in equity was less pronounced than the growth in debt. The increase was relatively steady year-over-year, though the absolute increase was larger between 2022 and 2023, and again between 2023 and 2024.
- Relationship between Components and Invested Capital
- The increase in invested capital is directly attributable to the combined growth of both debt & leases and stockholders’ equity. The increasing proportion of debt within the capital structure suggests a shift towards greater financial leverage. The consistent growth in invested capital, coupled with the increasing reliance on debt, warrants further investigation into the company’s capital allocation efficiency and its ability to generate returns exceeding the cost of capital.
The observed trends suggest a company actively investing in its operations and growth, funded by a combination of equity and, increasingly, debt. Continued monitoring of these figures is recommended to assess the sustainability of this growth strategy and the associated financial risks.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Cost of Capital
Meta Platforms Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,867,596) | 1,867,596) | ÷ | 1,951,153) | = | 0.96 | 0.96 | × | 20.86% | = | 19.96% | ||
| Long-term debt and finance lease liabilities3 | 58,404) | 58,404) | ÷ | 1,951,153) | = | 0.03 | 0.03 | × | 5.53% × (1 – 21.00%) | = | 0.13% | ||
| Operating lease liability4 | 25,153) | 25,153) | ÷ | 1,951,153) | = | 0.01 | 0.01 | × | 4.30% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 1,951,153) | 1.00 | 20.14% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,740,624) | 1,740,624) | ÷ | 1,789,397) | = | 0.97 | 0.97 | × | 20.86% | = | 20.29% | ||
| Long-term debt and finance lease liabilities3 | 28,539) | 28,539) | ÷ | 1,789,397) | = | 0.02 | 0.02 | × | 5.31% × (1 – 21.00%) | = | 0.07% | ||
| Operating lease liability4 | 20,234) | 20,234) | ÷ | 1,789,397) | = | 0.01 | 0.01 | × | 3.90% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 1,789,397) | 1.00 | 20.39% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,210,942) | 1,210,942) | ÷ | 1,248,961) | = | 0.97 | 0.97 | × | 20.86% | = | 20.22% | ||
| Long-term debt and finance lease liabilities3 | 19,170) | 19,170) | ÷ | 1,248,961) | = | 0.02 | 0.02 | × | 4.61% × (1 – 21.00%) | = | 0.06% | ||
| Operating lease liability4 | 18,849) | 18,849) | ÷ | 1,248,961) | = | 0.02 | 0.02 | × | 3.70% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 1,248,961) | 1.00 | 20.32% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 489,413) | 489,413) | ÷ | 515,398) | = | 0.95 | 0.95 | × | 20.86% | = | 19.80% | ||
| Long-term debt and finance lease liabilities3 | 9,317) | 9,317) | ÷ | 515,398) | = | 0.02 | 0.02 | × | 4.06% × (1 – 21.00%) | = | 0.06% | ||
| Operating lease liability4 | 16,668) | 16,668) | ÷ | 515,398) | = | 0.03 | 0.03 | × | 3.20% × (1 – 21.00%) | = | 0.08% | ||
| Total: | 515,398) | 1.00 | 19.94% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 647,169) | 647,169) | ÷ | 661,623) | = | 0.98 | 0.98 | × | 20.86% | = | 20.40% | ||
| Long-term debt and finance lease liabilities3 | 581) | 581) | ÷ | 661,623) | = | 0.00 | 0.00 | × | 2.70% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 13,873) | 13,873) | ÷ | 661,623) | = | 0.02 | 0.02 | × | 2.80% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 661,623) | 1.00 | 20.45% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Meta Platforms Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 36,110) | 23,004) | 9,572) | 533) | 21,169) | |
| Invested capital2 | 216,060) | 165,969) | 141,324) | 101,764) | 92,809) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 16.71% | 13.86% | 6.77% | 0.52% | 22.81% | |
| 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% | |
| Netflix Inc. | 1.00% | -3.69% | -9.95% | -10.48% | -5.88% | |
| Walt Disney Co. | -12.40% | -15.81% | -17.33% | -15.13% | -18.12% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 36,110 ÷ 216,060 = 16.71%
4 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 is characterized by a severe contraction in value creation in 2022, followed by a sustained and robust recovery phase. While invested capital has grown consistently throughout the period, economic profit and the resulting spread ratio experienced significant volatility before returning to a growth trend.
- Invested Capital Trends
- Invested capital shows a continuous upward trajectory, increasing from 92,809 million USD in 2021 to 216,060 million USD by 2025. This represents a substantial expansion of the capital base, with the most significant acceleration occurring between 2022 and 2023, where capital deployment increased by approximately 39%.
- Economic Profit Volatility
- Economic profit exhibited a sharp decline in 2022, dropping from 21,169 million USD to 533 million USD. This indicates a period where returns on capital nearly converged with the cost of capital. However, a strong recovery followed, with profits rising to 9,572 million USD in 2023 and reaching a period peak of 36,110 million USD by 2025.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrors the volatility of economic profit, plunging from 22.81% in 2021 to a low of 0.52% in 2022. The subsequent recovery shows a steady climb to 6.77% in 2023, 13.86% in 2024, and 16.71% in 2025. Although the ratio is trending upward, it remains below the 2021 high, suggesting that while value creation has intensified, the rate of return over the cost of capital has not yet fully returned to its initial peak despite the significantly larger capital base.
Overall, the analysis indicates a transition from a high-efficiency state in 2021 to a near-breakeven point in 2022, followed by a strategic scaling phase. The simultaneous increase in both invested capital and the economic spread ratio from 2023 through 2025 demonstrates a successful expansion of the business where growth is being achieved without sacrificing the ability to generate value in excess of the cost of capital.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?
Economic Profit Margin
Meta Platforms Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 36,110) | 23,004) | 9,572) | 533) | 21,169) | |
| Revenue | 200,966) | 164,501) | 134,902) | 116,609) | 117,929) | |
| Add: Increase (decrease) in deferred revenue | 308) | 97) | 149) | (70) | 225) | |
| Adjusted revenue | 201,274) | 164,598) | 135,051) | 116,539) | 118,154) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 17.94% | 13.98% | 7.09% | 0.46% | 17.92% | |
| 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% | |
| Netflix Inc. | 0.97% | -3.84% | -11.13% | -12.50% | -6.87% | |
| Walt Disney Co. | -21.70% | -28.77% | -33.84% | -31.15% | -46.18% | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × 36,110 ÷ 201,274 = 17.94%
3 Click competitor name to see calculations.
The financial trajectory between 2021 and 2025 is characterized by a significant volatility event in 2022, followed by a sustained and robust recovery in economic value creation.
- Economic Profit Performance
- A severe contraction occurred in 2022, where economic profit fell from 21,169 million US$ to 533 million US$. This decline was followed by a consistent upward trend, with values increasing to 9,572 million US$ in 2023, 23,004 million US$ in 2024, and reaching a peak of 36,110 million US$ by 2025.
- Adjusted Revenue Trajectory
- Revenue exhibited relative stability in 2022 with a marginal decrease to 116,539 million US$. Subsequently, a period of accelerated growth was observed, with revenue expanding to 135,051 million US$ in 2023 and surpassing 200,000 million US$ by the end of 2025.
- Economic Profit Margin Analysis
- The economic profit margin experienced a near-total collapse in 2022, dropping to 0.46%. The following three years demonstrate a strong recovery phase, with the margin expanding to 7.09% in 2023 and 13.98% in 2024. By December 31, 2025, the margin reached 17.94%, effectively returning to the baseline level established in 2021 (17.92%) but supported by a substantially larger revenue base.
The correlation between revenue growth and economic profit acceleration from 2023 to 2025 suggests a significant improvement in capital efficiency and operating leverage, allowing the organization to restore its value-creation capacity despite the extreme volatility encountered in 2022.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
How can I help you?