Economic Value Added (EVA)
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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.
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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2013
- Current Ratio since 2013
- Price to Book Value (P/BV) since 2013
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Economic Profit
T-Mobile US Inc., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT experienced a decline from 7,224 million USD in 2020 to 6,394 million USD in 2021, indicating a reduction in operational profitability. However, it recovered to 7,149 million USD in 2022 and then showed a significant upward trend reaching 14,313 million USD in 2023 and further to 18,486 million USD in 2024, reflecting enhanced operational performance and profitability over the most recent years.
- Cost of Capital
- The cost of capital showed a gradual increase over the analyzed period, starting at 7.37% in 2020, slightly decreasing to 7.32% in 2021, before rising to 7.74% in 2022, 7.82% in 2023, and reaching 8.35% in 2024. This upward trend suggests a growing required return by investors or an increase in the risk profile of the company’s investments.
- Invested Capital
- Invested capital demonstrated a relatively stable pattern, inching upward from 177,902 million USD in 2020 to 184,079 million USD in 2021, then to 186,262 million USD in 2022, maintaining a comparable level at 186,258 million USD in 2023, and slightly increasing again to 187,599 million USD in 2024. The modest growth indicates sustained investment in assets with limited expansion over the analyzed timeframe.
- Economic Profit
- The economic profit was negative and worsening from -5,894 million USD in 2020 to -7,089 million USD in 2021 and further to -7,272 million USD in 2022, reflecting that the company did not cover its cost of capital during these years. In 2023, economic profit improved markedly to -251 million USD, nearly breaching the break-even point, before turning positive to 2,827 million USD in 2024. This change signifies a meaningful improvement in value creation, where returns have begun to exceed the cost of capital significantly in the most recent year.
Net Operating Profit after Taxes (NOPAT)
T-Mobile US Inc., NOPAT calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in restructuring initiatives.
5 Addition of increase (decrease) in equity equivalents to net income.
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2024 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income.
9 Elimination of discontinued operations.
The financial data reveals significant fluctuations and overall growth in the profitability metrics over the five-year period.
- Net Income
-
Net income shows a moderate decline from 3,064 million USD in 2020 to 2,590 million USD in 2022. Subsequently, there is a marked increase to 8,317 million USD in 2023, followed by a further rise to 11,339 million USD in 2024. This indicates a strong recovery and substantial growth in the last two years after a period of decline.
- Net Operating Profit After Taxes (NOPAT)
-
NOPAT exhibits a decrease from 7,224 million USD in 2020 to 6,394 million USD in 2021, before increasing to 7,149 million USD in 2022. A significant surge is observed thereafter, with NOPAT reaching 14,313 million USD in 2023 and further climbing to 18,486 million USD in 2024. This trend reflects an improvement in operating efficiency and profitability after the initial decline.
Overall, while both net income and NOPAT experienced declines in the early years of the data, the subsequent periods demonstrate substantial growth. The acceleration in profitability metrics from 2023 onwards suggests successful operational improvements or favorable market conditions contributing to strengthened financial performance.
Cash Operating Taxes
T-Mobile US Inc., cash operating taxes calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
The analysis of the company's tax-related financial data over the five-year period reveals fluctuating trends with a notable increase in the most recent years.
- Income tax expense
- The income tax expense displays variability across the years. Initially, there was a decrease from $786 million in 2020 to $327 million in 2021, followed by a moderate increase to $556 million in 2022. However, a significant surge occurred in 2023, with the expense rising sharply to $2,682 million, and this upward trend continued into 2024, reaching $3,373 million. This pattern suggests a considerable change in taxable income or tax rates impacting the corporation during the latest two years.
- Cash operating taxes
- Cash operating taxes showed a gradual upward trend over the period. Starting at $895 million in 2020, this figure increased steadily to $1,053 million in 2021 and $1,058 million in 2022. The growth continued more modestly to $1,069 million in 2023 and then more notably to $1,244 million in 2024. The consistent increase indicates higher cash outflows related to operating taxes, potentially reflecting growth in operating activities or changes in tax payment structures.
Invested Capital
T-Mobile US Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
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 restructuring initiatives.
6 Addition of equity equivalents to stockholders’ equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of construction in progress.
The financial data over the five-year period displays several notable trends in key capital structure metrics. The total reported debt and leases have shown a consistent and gradual increase each year. This trend indicates a growing reliance on debt financing, as the total amount rose from approximately $104.2 billion at the end of 2020 to about $110.3 billion by the end of 2024.
In contrast, stockholders’ equity presented a different pattern. It increased from 2020 to 2022, peaking at nearly $69.7 billion, but then declined in the subsequent years, reaching approximately $61.7 billion by the end of 2024. This decline in equity after 2022 may suggest dividend distributions, share repurchases, or reduced retained earnings impacting the equity base.
Invested capital exhibited a steady rise over the period, though the rate of increase slowed towards the latter years. The invested capital grew from about $177.9 billion in 2020 to nearly $187.6 billion in 2024. This rise primarily reflects the combined effect of incremental increases in both debt and equity, despite the decrease in equity in later years.
- Total Reported Debt & Leases
- Consistently increased each year, signaling a rising debt burden and possibly a strategic shift towards leveraging external financing.
- Stockholders’ Equity
- Increased initially but then showed a declining trend after 2022, which may indicate capital return actions or earnings impacts on retained earnings.
- Invested Capital
- Grew steadily throughout the period, reflecting an overall expansion in capital resources, supported mainly by debt increases given the equity decline in the later years.
Overall, the period reflects a growing balance sheet with a greater proportion of financing coming through debt, coupled with a decreasing equity base after a certain point. This could suggest increased financial risk or a deliberate strategy to optimize the capital structure and shareholder returns. Further analysis on profitability and cash flows would be necessary to assess the sustainability of these trends.
Cost of Capital
T-Mobile US Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Short-term and long-term debt, including financing lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Short-term and long-term debt, including financing lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
T-Mobile US Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit has displayed a significant upward trend over the analyzed period. Starting with a substantial negative value of -5894 million USD in 2020, it deteriorated further to -7089 million USD in 2021 and -7272 million USD in 2022. However, a pronounced improvement is observed in 2023, with economic profit nearly breaking even at -251 million USD. By 2024, economic profit turned positive, reaching 2827 million USD, indicating a strong turnaround in value creation for shareholders.
- Invested Capital
- The invested capital exhibited a steady, moderate increase throughout the five-year period. It grew from 177,902 million USD in 2020 to 187,599 million USD in 2024, representing an approximate increase of 5.4%. This gradual expansion reflects ongoing investments or capital employed in the business operations without significant volatility.
- Economic Spread Ratio
- The economic spread ratio, which measures the difference between the return on invested capital and the cost of capital, started with a negative rate of -3.31% in 2020 and further declined to -3.85% in 2021, then to -3.9% in 2022. This indicates that the company’s returns were consistently below its cost of capital, reflecting value erosion during these years. A remarkable improvement occurred in 2023, with the ratio improving dramatically to -0.13%, approaching the break-even point. By 2024, the economic spread ratio turned positive, reaching 1.51%, suggesting that the company began generating returns above its cost of capital, thereby creating economic value.
- Overall Analysis
- The data reveals a period of economic value decline from 2020 to 2022, as evidenced by sustained negative economic profit and negative economic spreads despite a steady increase in invested capital. This situation reversed starting in 2023, with economic profit nearing breakeven and economic spread almost neutral, culminating in positive economic profit and economic spread in 2024. This shift indicates enhanced operational efficiency or better capital utilization leading to value creation. The steady invested capital base combined with improving profitability metrics suggests successful strategic or operational adjustments that improved financial performance over the latter part of the period.
Economic Profit Margin
T-Mobile US Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenues | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenues | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| AT&T Inc. | ||||||
| Verizon Communications Inc. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit displayed a negative trend from 2020 to 2022, increasing its deficit from -5894 million US dollars in 2020 to -7272 million US dollars in 2022. However, there was a marked improvement in 2023, with the economic profit rising sharply to -251 million, followed by a positive turnaround in 2024 with an economic profit of 2827 million US dollars. This shift indicates a significant enhancement in value creation starting in 2023.
- Adjusted Revenues
- Adjusted revenues showed growth from 2020 to 2021, rising from 68796 million to 79944 million US dollars. The revenues slightly decreased in 2022 to 79495 million and further to 78603 million in 2023. In 2024, revenues increased again to 81797 million US dollars. Overall, revenues experienced minor fluctuations but maintained a general upward trajectory by the end of the period.
- Economic Profit Margin
- The economic profit margin was negative throughout the period 2020 to 2022, deteriorating from -8.57% in 2020 to -9.15% in 2022. A dramatic recovery occurred starting in 2023, with the margin improving to nearly breakeven at -0.32%, and turning positive to 3.46% in 2024. This trend corresponds with the economic profit improvement, further confirming enhanced profitability and efficiency in capital use during the latter years.