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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

CVS Health Corp., 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	5,319)	9,523)	3,871)	9,170)	9,067)
Cost of capital²	7.27%	7.52%	8.03%	7.92%	6.91%
Invested capital³	131,642)	134,694)	123,703)	130,882)	136,669)

Economic profit⁴	(4,250)	(610)	(6,065)	(1,194)	(375)

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
= 5,319 – 7.27% × 131,642 = -4,250

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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.	CVS Health Corp. economic profit increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

CVS Health Corp., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income attributable to CVS Health	4,614)	8,344)	4,149)	7,910)	7,179)
Deferred income tax expense (benefit)¹	(572)	(676)	(2,075)	(428)	(564)
Increase (decrease) in allowance for credit losses²	64)	10)	(6)	(19)	39)
Increase (decrease) in equity equivalents³	(508)	(666)	(2,081)	(447)	(525)
Interest expense	2,958)	2,658)	2,287)	2,503)	2,907)
Interest expense, operating lease liability⁴	766)	800)	813)	872)	918)
Adjusted interest expense	3,724)	3,458)	3,100)	3,375)	3,825)
Tax benefit of interest expense⁵	(782)	(726)	(651)	(709)	(803)
Adjusted interest expense, after taxes⁶	2,942)	2,732)	2,449)	2,666)	3,022)
Net investment income	(2,153)	(1,153)	(838)	(1,199)	(798)
Investment income, before taxes	(2,153)	(1,153)	(838)	(1,199)	(798)
Tax expense (benefit) of investment income⁷	452)	242)	176)	252)	168)
Investment income, after taxes⁸	(1,701)	(911)	(662)	(947)	(630)
(Income) loss from discontinued operations, net of tax⁹	—)	—)	—)	—)	9)
Net income (loss) attributable to noncontrolling interest	(28)	24)	16)	(12)	13)
Net operating profit after taxes (NOPAT)	5,319)	9,523)	3,871)	9,170)	9,067)

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 equity equivalents to net income attributable to CVS Health.

⁴ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 16,650 × 4.60% = 766

⁵ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 3,724 × 21.00% = 782

⁶ Addition of after taxes interest expense to net income attributable to CVS Health.

⁷ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 2,153 × 21.00% = 452

⁸ Elimination of after taxes investment income.

⁹ Elimination of discontinued operations.

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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.	CVS Health Corp. NOPAT increased from 2022 to 2023 but then slightly decreased from 2023 to 2024 not reaching 2022 level.

CVS Health Corp., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Income tax provision	1,562)	2,805)	1,463)	2,522)	2,569)
Less: Deferred income tax expense (benefit)	(572)	(676)	(2,075)	(428)	(564)
Add: Tax savings from interest expense	782)	726)	651)	709)	803)
Less: Tax imposed on investment income	452)	242)	176)	252)	168)
Cash operating taxes	2,464)	3,965)	4,013)	3,407)	3,769)

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).

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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.	CVS Health Corp. cash operating taxes decreased from 2022 to 2023 and from 2023 to 2024.

CVS Health Corp., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Short-term debt	2,119)	200)	—)	—)	—)
Current portion of long-term debt	3,624)	2,772)	1,778)	4,205)	5,440)
Long-term debt, excluding current portion	60,527)	58,638)	50,476)	51,971)	59,207)
Operating lease liability¹	16,650)	17,775)	18,478)	19,823)	20,395)
Total reported debt & leases	82,920)	79,385)	70,732)	75,999)	85,042)
Total CVS Health shareholders’ equity	75,560)	76,461)	71,015)	75,075)	69,389)
Net deferred tax (assets) liabilities²	3,806)	4,311)	3,749)	6,270)	6,794)
Allowance for credit losses³	407)	343)	333)	339)	358)
Equity equivalents⁴	4,213)	4,654)	4,082)	6,609)	7,152)
Accumulated other comprehensive (income) loss, net of tax⁵	120)	297)	1,465)	(965)	(1,414)
Noncontrolling interests	170)	175)	300)	306)	312)
Adjusted total CVS Health shareholders’ equity	80,063)	81,587)	76,862)	81,025)	75,439)
Investments⁶	(31,341)	(26,278)	(23,891)	(26,142)	(23,812)
Invested capital	131,642)	134,694)	123,703)	130,882)	136,669)

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 equity equivalents to total CVS Health shareholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of investments.

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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.	CVS Health Corp. invested capital increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

CVS Health Corp., cost of capital calculations

Dec 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	79,707)	79,707)	÷	157,200)	=	0.51	0.51	×	10.78%	=	5.47%
Debt³	60,843)	60,843)	÷	157,200)	=	0.39	0.39	×	4.64% × (1 – 21.00%)	=	1.42%
Operating lease liability⁴	16,650)	16,650)	÷	157,200)	=	0.11	0.11	×	4.60% × (1 – 21.00%)	=	0.38%
Total:	157,200)					1.00					7.27%

Based on: 10-K (reporting date: 2024-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	95,705)	95,705)	÷	172,131)	=	0.56	0.56	×	10.78%	=	5.99%
Debt³	58,651)	58,651)	÷	172,131)	=	0.34	0.34	×	4.32% × (1 – 21.00%)	=	1.16%
Operating lease liability⁴	17,775)	17,775)	÷	172,131)	=	0.10	0.10	×	4.50% × (1 – 21.00%)	=	0.37%
Total:	172,131)					1.00					7.52%

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

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	114,235)	114,235)	÷	180,366)	=	0.63	0.63	×	10.78%	=	6.83%
Debt³	47,653)	47,653)	÷	180,366)	=	0.26	0.26	×	4.07% × (1 – 21.00%)	=	0.85%
Operating lease liability⁴	18,478)	18,478)	÷	180,366)	=	0.10	0.10	×	4.40% × (1 – 21.00%)	=	0.36%
Total:	180,366)					1.00					8.03%

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

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	137,538)	137,538)	÷	221,518)	=	0.62	0.62	×	10.78%	=	6.69%
Debt³	64,157)	64,157)	÷	221,518)	=	0.29	0.29	×	4.00% × (1 – 21.00%)	=	0.92%
Operating lease liability⁴	19,823)	19,823)	÷	221,518)	=	0.09	0.09	×	4.40% × (1 – 21.00%)	=	0.31%
Total:	221,518)					1.00					7.92%

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

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	92,490)	92,490)	÷	188,825)	=	0.49	0.49	×	10.78%	=	5.28%
Debt³	75,940)	75,940)	÷	188,825)	=	0.40	0.40	×	3.92% × (1 – 21.00%)	=	1.25%
Operating lease liability⁴	20,395)	20,395)	÷	188,825)	=	0.11	0.11	×	4.50% × (1 – 21.00%)	=	0.38%
Total:	188,825)					1.00					6.91%

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

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

CVS Health Corp., 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	(4,250)	(610)	(6,065)	(1,194)	(375)
Invested capital²	131,642)	134,694)	123,703)	130,882)	136,669)
Performance Ratio
Economic spread ratio³	-3.23%	-0.45%	-4.90%	-0.91%	-0.27%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	-2.33%	-2.64%	-0.42%	0.03%	-3.23%
Cigna Group	-2.35%	-2.83%	0.23%	-0.69%	2.21%
Elevance Health Inc.	-1.91%	-2.39%	-1.36%	0.02%	-2.30%
Intuitive Surgical Inc.	9.78%	3.33%	3.05%	18.66%	6.65%
Medtronic PLC	-5.11%	-4.86%	-3.62%	-5.23%	-4.32%
UnitedHealth Group Inc.	-0.33%	4.55%	3.58%	3.43%	4.06%

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 × -4,250 ÷ 131,642 = -3.23%

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.	CVS Health Corp. economic spread ratio improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024 not reaching 2022 level.

CVS Health Corp., 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	(4,250)	(610)	(6,065)	(1,194)	(375)
Revenues from customers	370,656)	356,623)	321,629)	290,912)	267,908)
Performance Ratio
Economic profit margin²	-1.15%	-0.17%	-1.89%	-0.41%	-0.14%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	-3.34%	-3.93%	-0.59%	0.05%	-5.64%
Cigna Group	-0.78%	-1.25%	0.11%	-0.36%	1.30%
Elevance Health Inc.	-0.85%	-0.98%	-0.58%	0.01%	-1.08%
Intuitive Surgical Inc.	9.09%	3.32%	2.63%	14.68%	6.81%
Medtronic PLC	-10.82%	-10.96%	-7.94%	-12.55%	-10.63%
UnitedHealth Group Inc.	-0.17%	2.26%	1.83%	1.68%	2.07%

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 ÷ Revenues from customers
= 100 × -4,250 ÷ 370,656 = -1.15%

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.	CVS Health Corp. economic profit margin improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024 not reaching 2022 level.

CVS Health Corp. (NYSE:CVS)

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