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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

Monster Beverage Corp., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	1,640,309)	1,225,215)	1,381,324)	1,236,715)	1,081,692)
Cost of capital²	11.80%	11.80%	11.80%	11.80%	11.80%
Invested capital³	7,284,194)	5,815,467)	4,854,459)	4,323,610)	3,936,622)

Economic profit⁴	781,138)	539,173)	808,547)	726,556)	617,360)

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

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
= 1,640,309 – 11.80% × 7,284,194 = 781,138

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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.	Monster Beverage Corp. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Monster Beverage Corp., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	1,630,988)	1,191,624)	1,377,475)	1,409,594)	1,107,835)
Deferred income tax expense (benefit)¹	30,677)	45,453)	24,531)	(151,485)	(2,777)
Increase (decrease) in allowance for doubtful accounts, sales returns and cash discounts²	(2,822)	5,784)	2,798)	(167)	456)
Increase (decrease) in deferred revenue³	(20,946)	(18,668)	(24,086)	(21,841)	(24,563)
Increase (decrease) in equity equivalents⁴	6,909)	32,569)	3,243)	(173,493)	(26,884)
Interest on finance lease liabilities	255)	24)	19)	39)	56)
Interest expense, operating lease liability⁵	2,799)	1,269)	748)	738)	882)
Adjusted interest on finance lease liabilities	3,054)	1,293)	767)	777)	938)
Tax benefit of interest on finance lease liabilities⁶	(641)	(272)	(161)	(163)	(197)
Adjusted interest on finance lease liabilities, after taxes⁷	2,412)	1,022)	606)	614)	741)
Net operating profit after taxes (NOPAT)	1,640,309)	1,225,215)	1,381,324)	1,236,715)	1,081,692)

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

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts, sales returns and cash discounts.

³ Addition of increase (decrease) in deferred revenue.

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

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 59,547 × 4.70% = 2,799

⁶ 2023 Calculation
Tax benefit of interest on finance lease liabilities = Adjusted interest on finance lease liabilities × Statutory income tax rate
= 3,054 × 21.00% = 641

⁷ Addition of after taxes interest expense to net 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.	Monster Beverage Corp. NOPAT decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Monster Beverage Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Provision for income taxes	437,494)	380,340)	423,944)	216,563)	308,127)
Less: Deferred income tax expense (benefit)	30,677)	45,453)	24,531)	(151,485)	(2,777)
Add: Tax savings from interest on finance lease liabilities	641)	272)	161)	163)	197)
Cash operating taxes	407,458)	335,159)	399,574)	368,211)	311,101)

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

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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.	Monster Beverage Corp. cash operating taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Monster Beverage Corp., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Current finance lease liabilities	6,449)	757)	960)	799)	1,485)
Noncurrent finance lease liabilities	19)	41)	41)	24)	—)
Operating lease liability¹	59,547)	37,333)	21,379)	20,513)	28,463)
Total reported debt & leases	66,015)	38,131)	22,380)	21,336)	29,948)
Stockholders’ equity	8,228,744)	7,025,041)	6,566,951)	5,160,860)	4,171,281)
Net deferred tax (assets) liabilities²	(146,107)	(177,039)	(225,221)	(241,650)	(84,777)
Allowance for doubtful accounts, sales returns and cash discounts³	7,638)	10,460)	4,676)	1,878)	2,045)
Deferred revenue⁴	246,165)	267,111)	285,779)	309,865)	331,706)
Equity equivalents⁵	107,696)	100,532)	65,234)	70,093)	248,974)
Accumulated other comprehensive (income) loss, net of tax⁶	125,337)	159,073)	69,165)	(3,034)	32,387)
Adjusted stockholders’ equity	8,461,777)	7,284,646)	6,701,350)	5,227,919)	4,452,642)
Assets under construction⁷	(211,562)	(83,553)	(20,125)	—)	—)
Investments, available-for-sale⁸	(1,032,036)	(1,423,757)	(1,849,146)	(925,645)	(545,968)
Invested capital	7,284,194)	5,815,467)	4,854,459)	4,323,610)	3,936,622)

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

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 deferred revenue.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of assets under construction.

⁸ Subtraction of investments, available-for-sale.

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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.	Monster Beverage Corp. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Monster Beverage Corp., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	61,501,601)	61,501,601)	÷	61,567,616)	=	1.00	1.00	×	11.80%	=	11.79%
Finance lease liabilities³	6,468)	6,468)	÷	61,567,616)	=	0.00	0.00	×	6.30% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	59,547)	59,547)	÷	61,567,616)	=	0.00	0.00	×	4.70% × (1 – 21.00%)	=	0.00%
Total:	61,567,616)					1.00					11.80%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	51,823,008)	51,823,008)	÷	51,861,139)	=	1.00	1.00	×	11.80%	=	11.79%
Finance lease liabilities³	798)	798)	÷	51,861,139)	=	0.00	0.00	×	3.60% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	37,333)	37,333)	÷	51,861,139)	=	0.00	0.00	×	3.40% × (1 – 21.00%)	=	0.00%
Total:	51,861,139)					1.00					11.80%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	44,677,888)	44,677,888)	÷	44,700,268)	=	1.00	1.00	×	11.80%	=	11.80%
Finance lease liabilities³	1,001)	1,001)	÷	44,700,268)	=	0.00	0.00	×	1.30% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	21,379)	21,379)	÷	44,700,268)	=	0.00	0.00	×	3.50% × (1 – 21.00%)	=	0.00%
Total:	44,700,268)					1.00					11.80%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	46,243,679)	46,243,679)	÷	46,265,015)	=	1.00	1.00	×	11.80%	=	11.80%
Finance lease liabilities³	823)	823)	÷	46,265,015)	=	0.00	0.00	×	1.90% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	20,513)	20,513)	÷	46,265,015)	=	0.00	0.00	×	3.60% × (1 – 21.00%)	=	0.00%
Total:	46,265,015)					1.00					11.80%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	33,513,057)	33,513,057)	÷	33,543,005)	=	1.00	1.00	×	11.80%	=	11.79%
Finance lease liabilities³	1,485)	1,485)	÷	33,543,005)	=	0.00	0.00	×	2.90% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	28,463)	28,463)	÷	33,543,005)	=	0.00	0.00	×	3.10% × (1 – 21.00%)	=	0.00%
Total:	33,543,005)					1.00					11.80%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in thousands

² Equity. See details »

³ Finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Monster Beverage Corp., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	781,138)	539,173)	808,547)	726,556)	617,360)
Invested capital²	7,284,194)	5,815,467)	4,854,459)	4,323,610)	3,936,622)
Performance Ratio
Economic spread ratio³	10.72%	9.27%	16.66%	16.80%	15.68%
Benchmarks
Economic Spread Ratio, Competitors⁴
Coca-Cola Co.	3.55%	3.23%	4.78%	2.59%	2.87%
Mondelēz International Inc.	-0.33%	-4.13%	-1.13%	-2.27%	-2.73%
PepsiCo Inc.	4.55%	4.53%	5.08%	3.73%	—
Philip Morris International Inc.	8.20%	11.11%	25.24%	18.97%	17.42%

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

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 781,138 ÷ 7,284,194 = 10.72%

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.	Monster Beverage Corp. economic spread ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Monster Beverage Corp., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	781,138)	539,173)	808,547)	726,556)	617,360)

Net sales	7,140,027)	6,311,050)	5,541,352)	4,598,638)	4,200,819)
Add: Increase (decrease) in deferred revenue	(20,946)	(18,668)	(24,086)	(21,841)	(24,563)
Adjusted net sales	7,119,081)	6,292,382)	5,517,266)	4,576,797)	4,176,256)
Performance Ratio
Economic profit margin²	10.97%	8.57%	14.65%	15.87%	14.78%
Benchmarks
Economic Profit Margin, Competitors³
Coca-Cola Co.	6.47%	6.01%	9.93%	5.93%	5.67%
Mondelēz International Inc.	-0.57%	-8.37%	-2.41%	-5.23%	-6.22%
PepsiCo Inc.	3.73%	3.64%	4.46%	3.72%	—
Philip Morris International Inc.	11.99%	16.60%	23.53%	21.13%	18.29%

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

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 781,138 ÷ 7,119,081 = 10.97%

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.	Monster Beverage Corp. economic profit margin deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023.

Monster Beverage Corp. (NASDAQ:MNST)

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