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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

Boston Scientific Corp., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net operating profit after taxes (NOPAT)¹	1,099)	1,270)	153)	829)	1,711)
Cost of capital²	10.83%	10.60%	10.38%	10.49%	10.99%
Invested capital³	22,868)	22,038)	21,053)	20,389)	16,047)

Economic profit⁴	(1,379)	(1,067)	(2,032)	(1,310)	(53)

Based on: 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), 10-K (reporting date: 2018-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,099 – 10.83% × 22,868 = -1,379

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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.	Boston Scientific Corp. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Boston Scientific Corp., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income (loss)	698)	1,041)	(82)	4,700)	1,671)
Deferred income tax expense (benefit)¹	(7)	(142)	(85)	(4,288)	(162)
Increase (decrease) in allowance for credit losses²	1)	3)	31)	6)	—)
Increase (decrease) in deferred revenue³	25)	89)	(5)	27)	—)
Increase (decrease) in equity equivalents⁴	19)	(50)	(59)	(4,255)	(162)
Interest expense	470)	341)	361)	473)	241)
Interest expense, operating lease liability⁵	13)	12)	11)	13)	13)
Adjusted interest expense	483)	353)	372)	486)	254)
Tax benefit of interest expense⁶	(102)	(74)	(78)	(102)	(53)
Adjusted interest expense, after taxes⁷	382)	279)	294)	384)	201)
(Gain) loss on marketable securities	—)	—)	—)	—)	1)
Investment income, before taxes	—)	—)	—)	—)	1)
Tax expense (benefit) of investment income⁸	—)	—)	—)	—)	—)
Investment income, after taxes⁹	—)	—)	—)	—)	1)
Net operating profit after taxes (NOPAT)	1,099)	1,270)	153)	829)	1,711)

Based on: 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), 10-K (reporting date: 2018-12-31).

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 equity equivalents to net income (loss).

⁵ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 408 × 3.30% = 13

⁶ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 483 × 21.00% = 102

⁷ Addition of after taxes interest expense to net income (loss).

⁸ 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 0 × 21.00% = 0

⁹ Elimination of after taxes investment 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.	Boston Scientific Corp. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Boston Scientific Corp., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Income tax expense (benefit)	443)	36)	2)	(4,013)	(249)
Less: Deferred income tax expense (benefit)	(7)	(142)	(85)	(4,288)	(162)
Add: Tax savings from interest expense	102)	74)	78)	102)	53)
Less: Tax imposed on investment income	—)	—)	—)	—)	—)
Cash operating taxes	552)	252)	165)	377)	(33)

Based on: 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), 10-K (reporting date: 2018-12-31).

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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.	Boston Scientific Corp. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

Boston Scientific Corp., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Current debt obligations	20)	261)	13)	1,416)	2,253)
Long-term debt	8,915)	8,804)	9,130)	8,592)	4,803)
Operating lease liability¹	408)	460)	471)	343)	308)
Total reported debt & leases	9,343)	9,525)	9,614)	10,351)	7,364)
Stockholders’ equity	17,573)	16,622)	15,326)	13,877)	8,726)
Net deferred tax (assets) liabilities²	(3,799)	(3,833)	(3,734)	(3,601)	241)
Allowance for credit losses³	109)	108)	105)	74)	68)
Deferred revenue⁴	509)	484)	395)	400)	—)
Equity equivalents⁵	(3,181)	(3,241)	(3,234)	(3,127)	309)
Accumulated other comprehensive (income) loss, net of tax⁶	(269)	(263)	(207)	(270)	(33)
Adjusted stockholders’ equity	14,123)	13,118)	11,885)	10,480)	9,002)
Capital in progress⁷	(598)	(605)	(446)	(442)	(319)
Invested capital	22,868)	22,038)	21,053)	20,389)	16,047)

Based on: 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), 10-K (reporting date: 2018-12-31).

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 capital in progress.

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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.	Boston Scientific Corp. invested capital increased from 2020 to 2021 and from 2021 to 2022.

Boston Scientific Corp., cost of capital calculations

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	67,693)	67,693)	÷	77,459)	=	0.87	0.87	×	12.03%	=	10.52%
5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share	1,155)	1,155)	÷	77,459)	=	0.01	0.01	×	5.50%	=	0.08%
Outstanding debt obligations³	8,203)	8,203)	÷	77,459)	=	0.11	0.11	×	2.65% × (1 – 21.00%)	=	0.22%
Operating lease liability⁴	408)	408)	÷	77,459)	=	0.01	0.01	×	3.30% × (1 – 21.00%)	=	0.01%
Total:	77,459)					1.00					10.83%

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

¹ US$ in millions

² Equity. See details »

³ Outstanding debt obligations. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	62,362)	62,362)	÷	74,172)	=	0.84	0.84	×	12.03%	=	10.12%
5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share	1,154)	1,154)	÷	74,172)	=	0.02	0.02	×	5.50%	=	0.09%
Outstanding debt obligations³	10,196)	10,196)	÷	74,172)	=	0.14	0.14	×	3.58% × (1 – 21.00%)	=	0.39%
Operating lease liability⁴	460)	460)	÷	74,172)	=	0.01	0.01	×	2.60% × (1 – 21.00%)	=	0.01%
Total:	74,172)					1.00					10.60%

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

¹ US$ in millions

² Equity. See details »

³ Outstanding debt obligations. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	54,915)	54,915)	÷	67,263)	=	0.82	0.82	×	12.03%	=	9.82%
5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share	1,103)	1,103)	÷	67,263)	=	0.02	0.02	×	5.50%	=	0.09%
Outstanding debt obligations³	10,774)	10,774)	÷	67,263)	=	0.16	0.16	×	3.55% × (1 – 21.00%)	=	0.45%
Operating lease liability⁴	471)	471)	÷	67,263)	=	0.01	0.01	×	2.40% × (1 – 21.00%)	=	0.01%
Total:	67,263)					1.00					10.38%

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

¹ US$ in millions

² Equity. See details »

³ Outstanding debt obligations. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	55,722)	55,722)	÷	67,085)	=	0.83	0.83	×	12.03%	=	10.00%
5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share	—)	—)	÷	67,085)	=	0.00	0.00	×	0.00%	=	0.00%
Outstanding debt obligations³	11,020)	11,020)	÷	67,085)	=	0.16	0.16	×	3.70% × (1 – 21.00%)	=	0.48%
Operating lease liability⁴	343)	343)	÷	67,085)	=	0.01	0.01	×	3.70% × (1 – 21.00%)	=	0.01%
Total:	67,085)					1.00					10.49%

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

¹ US$ in millions

² Equity. See details »

³ Outstanding debt obligations. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	55,244)	55,244)	÷	62,791)	=	0.88	0.88	×	12.03%	=	10.59%
5.50% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share	—)	—)	÷	62,791)	=	0.00	0.00	×	0.00%	=	0.00%
Outstanding debt obligations³	7,239)	7,239)	÷	62,791)	=	0.12	0.12	×	4.25% × (1 – 21.00%)	=	0.39%
Operating lease liability⁴	308)	308)	÷	62,791)	=	0.00	0.00	×	4.25% × (1 – 21.00%)	=	0.02%
Total:	62,791)					1.00					10.99%

Based on: 10-K (reporting date: 2018-12-31).

¹ US$ in millions

² Equity. See details »

³ Outstanding debt obligations. See details »

⁴ Operating lease liability. See details »

Boston Scientific Corp., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	(1,379)	(1,067)	(2,032)	(1,310)	(53)
Invested capital²	22,868)	22,038)	21,053)	20,389)	16,047)
Performance Ratio
Economic spread ratio³	-6.03%	-4.84%	-9.65%	-6.43%	-0.33%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	0.21%	0.66%	-2.61%	-3.93%	—
Cigna Group	0.77%	-0.21%	2.68%	-0.53%	—
CVS Health Corp.	-4.00%	-0.03%	0.42%	-0.36%	—
Elevance Health Inc.	-0.20%	1.08%	-0.90%	-0.07%	—
Humana Inc.	2.35%	2.69%	9.55%	7.68%	—
Intuitive Surgical Inc.	4.99%	20.61%	8.59%	25.27%	—
Medtronic PLC	-2.89%	-4.49%	-3.60%	-2.52%	—
UnitedHealth Group Inc.	4.71%	4.57%	5.14%	5.17%	—

Based on: 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), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,379 ÷ 22,868 = -6.03%

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.	Boston Scientific Corp. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Boston Scientific Corp., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	(1,379)	(1,067)	(2,032)	(1,310)	(53)

Net sales	12,682)	11,888)	9,913)	10,735)	9,823)
Add: Increase (decrease) in deferred revenue	25)	89)	(5)	27)	—)
Adjusted net sales	12,707)	11,977)	9,908)	10,762)	9,823)
Performance Ratio
Economic profit margin²	-10.85%	-8.91%	-20.50%	-12.17%	-0.54%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	0.30%	0.95%	-4.55%	-7.16%	—
Cigna Group	0.37%	-0.11%	1.58%	-0.32%	—
CVS Health Corp.	-1.54%	-0.01%	0.21%	-0.20%	—
Elevance Health Inc.	-0.09%	0.50%	-0.43%	-0.04%	—
Humana Inc.	0.74%	0.99%	2.74%	2.25%	—
Intuitive Surgical Inc.	4.31%	16.21%	8.81%	18.73%	—
Medtronic PLC	-6.34%	-10.76%	-8.87%	-5.98%	—
UnitedHealth Group Inc.	2.41%	2.24%	2.62%	2.52%	—

Based on: 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), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -1,379 ÷ 12,707 = -10.85%

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.	Boston Scientific Corp. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Boston Scientific Corp. (NYSE:BSX)

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