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
Micron Technology Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2026-09-03), 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2026 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 83,723 – 30.83% × 96,188 = 54,067
The analyzed period is characterized by significant volatility in operational profitability and a prolonged phase of economic value destruction, culminating in a sharp reversal in the final year. From 2021 through 2025, the entity failed to generate returns exceeding its cost of capital, although a dramatic surge in performance occurred in 2026.
- Operational Profitability Trends
- Net operating profit after taxes (NOPAT) exhibited extreme fluctuations. Following a peak in 2022 at 9,054 million US$, a severe contraction occurred in 2023, resulting in a loss of 5,903 million US$. A gradual recovery followed in 2024 and 2025, leading to an exponential increase to 83,723 million US$ by 2026.
- Capital Investment and Cost of Capital
- Invested capital showed a steady upward trajectory, increasing from 45,783 million US$ in 2021 to 60,398 million US$ in 2025, before nearly doubling to 96,188 million US$ in 2026. Simultaneously, the cost of capital remained relatively stable, oscillating between 27.12% and 30.83%, indicating a consistent and high hurdle rate for investment returns.
- Economic Profit and Value Creation
- Economic profit remained negative for five consecutive years, reaching its lowest point in 2023 at -20,224 million US$. This sustained negative trend indicates that the operating returns were insufficient to cover the cost of the capital employed during this period. However, 2026 represents a pivotal shift, with economic profit turning positive and reaching 54,067 million US$, signaling a transition from value destruction to substantial value creation.
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Net Operating Profit after Taxes (NOPAT)
Micron Technology Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2026-09-03), 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in equity equivalents to net income (loss).
3 2026 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 106 × 21.00% = 22
4 Addition of after taxes interest expense to net income (loss).
5 2026 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,084 × 21.00% = 228
6 Elimination of after taxes investment income.
The financial trajectory of Net Operating Profit After Taxes (NOPAT) and Net Income demonstrates significant volatility over the analyzed period, characterized by a cyclical pattern of growth, a sharp contraction, and a subsequent exponential increase.
- Operating Performance Volatility
- A period of initial growth is observed between September 2021 and September 2022, with NOPAT increasing from US$ 5,957 million to US$ 9,054 million. This growth was followed by a severe downturn in August 2023, where NOPAT collapsed to a deficit of US$ 5,903 million, reflecting a significant operational contraction.
- Recovery and Exponential Expansion
- A recovery phase began in August 2024, as NOPAT returned to positive territory at US$ 839 million. This upward trend accelerated through August 2025, reaching US$ 8,688 million, and culminated in an exponential surge by September 2026, with NOPAT climbing to US$ 83,723 million.
- Correlation Between NOPAT and Net Income
- A strong positive correlation is maintained between NOPAT and Net Income across all reporting periods. The narrow variance between these two metrics indicates that the company's overall profitability is primarily driven by core operational performance, with minimal impact from non-operating income or expenses.
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Cash Operating Taxes
Micron Technology Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2026-09-03), 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02).
The analysis of tax expenditures reveals a period of moderate volatility followed by an exponential increase in both income tax provisions and cash operating taxes. From 2021 to 2025, tax obligations remained relatively contained, while the 2026 fiscal period reflects a substantial escalation in tax outflows.
- Historical Trend Analysis (2021–2025)
- Tax expenditures exhibited significant fluctuations during the initial five-year period. Cash operating taxes peaked in 2022 at 614 million USD before dropping to a low of 167 million USD in 2023. A recovery phase began in 2024 and 2025, with cash operating taxes rising to 423 million USD and 956 million USD, respectively. This pattern suggests a period of unstable earnings or varying tax credits and deferrals.
- Fiscal Year 2026 Escalation
- A profound shift occurs in 2026, characterized by an unprecedented surge in tax obligations. Cash operating taxes increased from 956 million USD in 2025 to 15,029 million USD in 2026. This represents a growth of approximately 1,470%, indicating a massive increase in taxable income or the resolution of significant deferred tax assets.
- Comparison of Provision vs. Cash Outflow
- The relationship between the income tax provision and cash operating taxes remains closely aligned, though divergences are present. In 2022, the income tax provision exceeded cash taxes by 274 million USD, whereas in 2026, the cash operating taxes surpassed the provision by 268 million USD. This variance typically indicates timing differences between accrual-based tax accounting and actual cash disbursements.
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Invested Capital
Micron Technology Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2026-09-03), 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02).
1 Elimination of deferred taxes from assets and liabilities. See details »
2 Addition of equity equivalents to shareholders’ equity.
3 Removal of accumulated other comprehensive income.
4 Subtraction of construction in progress.
5 Subtraction of marketable debt investments.
Invested capital exhibits a consistent long-term upward trajectory, increasing from 45,783 million USD in 2021 to 96,188 million USD by 2026. While the growth was gradual between 2021 and 2024, a significant acceleration occurred in the final two years of the period, indicating a substantial expansion of the capital base used to generate economic value.
- Invested Capital Trends
- A period of relative stability is observed between 2023 and 2024, where invested capital remained nearly flat at approximately 52,700 million USD. This was followed by a marked increase in 2025 to 60,398 million USD and a sharp surge to 96,188 million USD in 2026, reflecting a significant increase in total resources deployed.
- Debt and Lease Obligations
- Total reported debt and leases experienced a sharp increase between 2022 and 2023, nearly doubling from 6,906 million USD to 13,330 million USD. This elevated debt level persisted through 2025, peaking at 14,577 million USD, before a dramatic reduction to 5,179 million USD was recorded in 2026, indicating a major deleveraging event.
- Shareholders' Equity Dynamics
- Shareholders' equity showed volatility in the early period, with a decline in 2023 to 44,120 million USD. A strong recovery is evident from 2025 onward, culminating in an exceptional increase to 138,378 million USD in 2026. This rapid expansion in equity coincides with the simultaneous reduction in reported debt, signaling a fundamental shift in the capital structure toward equity-based financing.
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Cost of Capital
Micron Technology Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 1,164,234) | 1,164,234) | ÷ | 1,169,051) | = | 1.00 | 1.00 | × | 30.95% | = | 30.82% | ||
| Debt3 | 4,817) | 4,817) | ÷ | 1,169,051) | = | 0.00 | 0.00 | × | 4.30% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 1,169,051) | 1.00 | 30.83% | ||||||||||
Based on: 10-K (reporting date: 2026-09-03).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 210,833) | 210,833) | ÷ | 225,447) | = | 0.94 | 0.94 | × | 30.95% | = | 28.94% | ||
| Debt3 | 14,614) | 14,614) | ÷ | 225,447) | = | 0.06 | 0.06 | × | 5.29% × (1 – 21.00%) | = | 0.27% | ||
| Total: | 225,447) | 1.00 | 29.21% | ||||||||||
Based on: 10-K (reporting date: 2025-08-28).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 113,369) | 113,369) | ÷ | 126,739) | = | 0.89 | 0.89 | × | 30.95% | = | 27.68% | ||
| Debt3 | 13,370) | 13,370) | ÷ | 126,739) | = | 0.11 | 0.11 | × | 5.29% × (1 – 21.00%) | = | 0.44% | ||
| Total: | 126,739) | 1.00 | 28.12% | ||||||||||
Based on: 10-K (reporting date: 2024-08-29).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 76,818) | 76,818) | ÷ | 89,648) | = | 0.86 | 0.86 | × | 30.95% | = | 26.52% | ||
| Debt3 | 12,830) | 12,830) | ÷ | 89,648) | = | 0.14 | 0.14 | × | 5.37% × (1 – 21.00%) | = | 0.61% | ||
| Total: | 89,648) | 1.00 | 27.12% | ||||||||||
Based on: 10-K (reporting date: 2023-08-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 57,522) | 57,522) | ÷ | 63,880) | = | 0.90 | 0.90 | × | 30.95% | = | 27.87% | ||
| Debt3 | 6,358) | 6,358) | ÷ | 63,880) | = | 0.10 | 0.10 | × | 3.87% × (1 – 21.00%) | = | 0.30% | ||
| Total: | 63,880) | 1.00 | 28.17% | ||||||||||
Based on: 10-K (reporting date: 2022-09-01).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 78,438) | 78,438) | ÷ | 85,825) | = | 0.91 | 0.91 | × | 30.95% | = | 28.28% | ||
| Debt3 | 7,387) | 7,387) | ÷ | 85,825) | = | 0.09 | 0.09 | × | 3.54% × (1 – 21.00%) | = | 0.24% | ||
| Total: | 85,825) | 1.00 | 28.52% | ||||||||||
Based on: 10-K (reporting date: 2021-09-02).
Economic Spread Ratio
Micron Technology Inc., economic spread ratio calculation, comparison to benchmarks
| Sep 3, 2026 | Aug 28, 2025 | Aug 29, 2024 | Aug 31, 2023 | Sep 1, 2022 | Sep 2, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 54,067) | (8,954) | (13,966) | (20,224) | (5,614) | (7,101) | |
| Invested capital2 | 96,188) | 60,398) | 52,646) | 52,798) | 52,071) | 45,783) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 56.21% | -14.83% | -26.53% | -38.30% | -10.78% | -15.51% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | -21.43% | -27.69% | -29.12% | -28.73% | 27.84% | |
| Analog Devices Inc. | — | -12.05% | -14.17% | -10.08% | -11.45% | -14.69% | |
| Applied Materials Inc. | — | 17.08% | 10.19% | 13.17% | 23.15% | 18.63% | |
| Broadcom Inc. | — | -2.99% | -10.41% | 4.82% | 3.57% | -5.66% | |
| Intel Corp. | — | -18.73% | -30.05% | -19.94% | -13.15% | 3.44% | |
| KLA Corp. | 27.56% | 20.46% | 16.11% | 20.05% | 22.45% | 10.91% | |
| Lam Research Corp. | 11.73% | 11.91% | -3.21% | 2.15% | 17.18% | 12.51% | |
| Marvell Technology Inc. | -8.89% | -26.62% | -26.65% | -22.31% | -25.08% | -26.81% | |
| NVIDIA Corp. | 86.10% | 117.20% | 61.75% | -16.34% | 25.86% | 6.34% | |
| Qualcomm Inc. | — | 12.42% | 7.62% | 0.15% | 26.59% | 23.99% | |
| Texas Instruments Inc. | — | 2.39% | 2.70% | 12.32% | 32.90% | 31.53% | |
Based on: 10-K (reporting date: 2026-09-03), 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02).
1 Economic profit. See details »
2 Invested capital. See details »
3 2026 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 54,067 ÷ 96,188 = 56.21%
4 Click competitor name to see calculations.
The financial trajectory from 2021 to 2026 exhibits a cycle of value erosion followed by a phased recovery and a definitive pivot toward substantial value creation. For five consecutive years, economic profit remained negative, indicating that returns were insufficient to cover the weighted cost of capital, before a sharp reversal occurred in the final year of the period.
- Economic Spread Ratio Volatility
- The economic spread ratio experienced significant fluctuations, reaching a minimum of -38.30% in 2023, which marks the period of peak value destruction. A gradual recovery trend followed in 2024 and 2025, with the ratio improving to -26.53% and -14.83%, respectively. By 2026, the ratio surged to 56.21%, representing a complete turnaround in the company's ability to generate returns above its cost of capital.
- Economic Profit Analysis
- Economic profit showed a deep decline between 2022 and 2023, dropping from -5,614 million US$ to -20,224 million US$. This deficit narrowed steadily over the next two years. The trend culminated in a dramatic shift in 2026, where economic profit pivoted to a positive 54,067 million US$, signaling the transition to an era of positive economic value added.
- Invested Capital Expansion
- Invested capital grew consistently from 45,783 million US$ in 2021 to 60,398 million US$ in 2025. A significant acceleration in capital expenditure is observed in 2026, with invested capital rising to 96,188 million US$. The synchronization of this capital expansion with the leap in the economic spread ratio suggests that the increased investment was highly efficient and served as a catalyst for the subsequent surge in economic profit.
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Economic Profit Margin
Micron Technology Inc., economic profit margin calculation, comparison to benchmarks
| Sep 3, 2026 | Aug 28, 2025 | Aug 29, 2024 | Aug 31, 2023 | Sep 1, 2022 | Sep 2, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 54,067) | (8,954) | (13,966) | (20,224) | (5,614) | (7,101) | |
| Revenue | 133,188) | 37,378) | 25,111) | 15,540) | 30,758) | 27,705) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 40.59% | -23.96% | -55.62% | -130.14% | -18.25% | -25.63% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | — | -38.19% | -62.53% | -74.32% | -71.26% | 10.49% | |
| Analog Devices Inc. | — | -46.01% | -65.44% | -36.21% | -42.90% | -94.37% | |
| Applied Materials Inc. | — | 12.11% | 7.09% | 8.83% | 13.37% | 11.89% | |
| Broadcom Inc. | — | -7.02% | -28.45% | 8.44% | 6.68% | -13.34% | |
| Intel Corp. | — | -41.31% | -52.23% | -33.86% | -18.50% | 3.85% | |
| KLA Corp. | 20.82% | 15.65% | 13.83% | 15.93% | 18.98% | 10.75% | |
| Lam Research Corp. | 9.13% | 9.96% | -3.26% | 1.89% | 12.68% | 10.09% | |
| Marvell Technology Inc. | -20.64% | -82.24% | -92.17% | -75.41% | -111.94% | -82.30% | |
| NVIDIA Corp. | 41.70% | 42.44% | 31.17% | -12.92% | 17.34% | 4.95% | |
| Qualcomm Inc. | — | 8.77% | 6.04% | 0.13% | 17.71% | 14.45% | |
| Texas Instruments Inc. | — | 3.86% | 4.51% | 15.89% | 28.85% | 28.21% | |
Based on: 10-K (reporting date: 2026-09-03), 10-K (reporting date: 2025-08-28), 10-K (reporting date: 2024-08-29), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02).
1 Economic profit. See details »
2 2026 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × 54,067 ÷ 133,188 = 40.59%
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2026 is characterized by a period of significant value destruction followed by an exponential recovery and a transition to substantial value creation. For the majority of the period, the entity operated with a negative economic profit, indicating that returns were insufficient to cover the cost of capital. However, a dramatic reversal occurred in the final year, resulting in a shift from persistent losses to high profitability.
- Revenue Dynamics
- Revenue exhibited extreme volatility, starting at 27,705 million USD in 2021 and peaking at 30,758 million USD in 2022. A severe contraction occurred in 2023, where revenue fell to 15,540 million USD. This was followed by a steady recovery through 2024 and 2025, culminating in an unprecedented surge to 133,188 million USD by September 2026.
- Economic Profit Trends
- Economic profit remained negative between 2021 and 2025, reaching a trough of -20,224 million USD in 2023. While the losses narrowed gradually in 2024 and 2025, the 2026 fiscal year marked a fundamental pivot, with economic profit swinging to a positive 54,067 million USD, signifying that the entity began generating returns well above its cost of capital.
- Economic Profit Margin Analysis
- The economic profit margin mirrors the volatility of revenue and profit. The margin deteriorated sharply to -130.14% in 2023, highlighting a period where economic losses far exceeded total revenue. A consistent upward trend followed, with the margin improving to -55.62% in 2024 and -23.96% in 2025. The cycle concluded with a shift to a positive margin of 40.59% in 2026, reflecting a drastic improvement in operational efficiency and value generation relative to sales.
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