Stock Analysis on Net

Chevron Corp. (NYSE:CVX)

Economic Value Added (EVA)

Microsoft Excel

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

Chevron Corp., economic profit calculation

US$ in millions

Microsoft Excel
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 20,090 19,473 41,794 19,443 (10,295)
Cost of capital2 14.85% 15.03% 15.05% 14.43% 13.22%
Invested capital3 208,395 212,337 212,342 193,606 197,314
 
Economic profit4 (10,858) (12,442) 9,840 (8,489) (36,389)

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
= 20,09014.85% × 208,395 = -10,858

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. Chevron Corp. economic profit decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Net Operating Profit after Taxes (NOPAT)

Chevron Corp., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income (loss) attributable to Chevron Corporation 17,661 21,369 35,465 15,625 (5,543)
Deferred income tax expense (benefit)1 1,240 322 2,123 700 (3,608)
Increase (decrease) in allowance2 (42) (156) 154 19 (462)
Increase (decrease) in LIFO reserve3 (458) (2,606) 3,473 2,839 (1,764)
Increase (decrease) in accrued severance liability4 984 (5) (32) (427) 463
Increase (decrease) in equity equivalents5 1,724 (2,445) 5,718 3,131 (5,371)
Interest and debt expense 594 469 516 712 697
Interest expense, operating lease liability6 188 173 77 77 109
Adjusted interest and debt expense 782 642 593 789 806
Tax benefit of interest and debt expense7 (164) (135) (124) (166) (169)
Adjusted interest and debt expense, after taxes8 617 507 468 623 637
Net income (loss) attributable to noncontrolling interest 88 42 143 64 (18)
Net operating profit after taxes (NOPAT) 20,090 19,473 41,794 19,443 (10,295)

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.

3 Addition of increase (decrease) in LIFO reserve. See details »

4 Addition of increase (decrease) in accrued severance liability.

5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to Chevron Corporation.

6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 5,070 × 3.70% = 188

7 2024 Calculation
Tax benefit of interest and debt expense = Adjusted interest and debt expense × Statutory income tax rate
= 782 × 21.00% = 164

8 Addition of after taxes interest expense to net income (loss) attributable to Chevron Corporation.

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. Chevron Corp. NOPAT decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Cash Operating Taxes

Chevron Corp., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Income tax expense (benefit) 9,757 8,173 14,066 5,950 (1,892)
Less: Deferred income tax expense (benefit) 1,240 322 2,123 700 (3,608)
Add: Tax savings from interest and debt expense 164 135 124 166 169
Cash operating taxes 8,681 7,986 12,067 5,416 1,885

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).

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. Chevron Corp. cash operating taxes decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Invested Capital

Chevron Corp., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Short-term debt 4,406 529 1,964 256 1,548
Long-term debt, excluding debt due within one year 20,135 20,307 21,375 31,113 42,767
Operating lease liability1 5,070 5,234 4,031 3,503 3,906
Total reported debt & leases 29,611 26,070 27,370 34,872 48,221
Total Chevron Corporation stockholders’ equity 152,318 160,957 159,282 139,067 131,688
Net deferred tax (assets) liabilities2 15,621 14,661 12,626 9,006 7,283
Allowance3 259 301 457 303 284
LIFO reserve4 5,997 6,455 9,061 5,588 2,749
Accrued severance liability5 990 6 11 43 470
Equity equivalents6 22,867 21,423 22,155 14,940 10,786
Accumulated other comprehensive (income) loss, net of tax7 2,760 2,960 2,798 3,889 5,612
Redeemable noncontrolling interest 166 142 135 120
Noncontrolling interests 839 806 818 738 918
Adjusted total Chevron Corporation stockholders’ equity 178,784 186,312 185,195 158,769 149,124
Marketable securities8 (45) (223) (35) (31)
Invested capital 208,395 212,337 212,342 193,606 197,314

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 LIFO reserve. See details »

5 Addition of accrued severance liability.

6 Addition of equity equivalents to total Chevron Corporation stockholders’ equity.

7 Removal of accumulated other comprehensive income.

8 Subtraction of marketable securities.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Chevron Corp. invested capital decreased from 2022 to 2023 and from 2023 to 2024.

Cost of Capital

Chevron Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 276,273 276,273 ÷ 304,336 = 0.91 0.91 × 16.11% = 14.63%
Debt3 22,993 22,993 ÷ 304,336 = 0.08 0.08 × 2.91% × (1 – 21.00%) = 0.17%
Operating lease liability4 5,070 5,070 ÷ 304,336 = 0.02 0.02 × 3.70% × (1 – 21.00%) = 0.05%
Total: 304,336 1.00 14.85%

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 »

Capital (fair value)1 Weights Cost of capital
Equity2 286,855 286,855 ÷ 311,444 = 0.92 0.92 × 16.11% = 14.84%
Debt3 19,355 19,355 ÷ 311,444 = 0.06 0.06 × 2.94% × (1 – 21.00%) = 0.14%
Operating lease liability4 5,234 5,234 ÷ 311,444 = 0.02 0.02 × 3.30% × (1 – 21.00%) = 0.04%
Total: 311,444 1.00 15.03%

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 »

Capital (fair value)1 Weights Cost of capital
Equity2 308,748 308,748 ÷ 334,155 = 0.92 0.92 × 16.11% = 14.89%
Debt3 21,376 21,376 ÷ 334,155 = 0.06 0.06 × 2.79% × (1 – 21.00%) = 0.14%
Operating lease liability4 4,031 4,031 ÷ 334,155 = 0.01 0.01 × 1.90% × (1 – 21.00%) = 0.02%
Total: 334,155 1.00 15.05%

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 »

Capital (fair value)1 Weights Cost of capital
Equity2 262,628 262,628 ÷ 298,265 = 0.88 0.88 × 16.11% = 14.19%
Debt3 32,134 32,134 ÷ 298,265 = 0.11 0.11 × 2.56% × (1 – 21.00%) = 0.22%
Operating lease liability4 3,503 3,503 ÷ 298,265 = 0.01 0.01 × 2.20% × (1 – 21.00%) = 0.02%
Total: 298,265 1.00 14.43%

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 »

Capital (fair value)1 Weights Cost of capital
Equity2 197,165 197,165 ÷ 247,281 = 0.80 0.80 × 16.11% = 12.85%
Debt3 46,210 46,210 ÷ 247,281 = 0.19 0.19 × 2.31% × (1 – 21.00%) = 0.34%
Operating lease liability4 3,906 3,906 ÷ 247,281 = 0.02 0.02 × 2.80% × (1 – 21.00%) = 0.03%
Total: 247,281 1.00 13.22%

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 »


Economic Spread Ratio

Chevron Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 (10,858) (12,442) 9,840 (8,489) (36,389)
Invested capital2 208,395 212,337 212,342 193,606 197,314
Performance Ratio
Economic spread ratio3 -5.21% -5.86% 4.63% -4.38% -18.44%
Benchmarks
Economic Spread Ratio, Competitors4
ConocoPhillips -5.37% 0.03% 12.63% -1.27% -19.81%
Exxon Mobil Corp. -4.61% -0.45% 8.28% -0.12% -23.32%
Occidental Petroleum Corp. -9.32% -5.74% 6.67% -5.20% -34.08%

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 × -10,858 ÷ 208,395 = -5.21%

4 Click competitor name to see calculations.

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. Chevron Corp. economic spread ratio deteriorated from 2022 to 2023 but then slightly improved from 2023 to 2024.

Economic Profit Margin

Chevron Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Selected Financial Data (US$ in millions)
Economic profit1 (10,858) (12,442) 9,840 (8,489) (36,389)
Sales and other operating revenues 193,414 196,913 235,717 155,606 94,471
Performance Ratio
Economic profit margin2 -5.61% -6.32% 4.17% -5.46% -38.52%
Benchmarks
Economic Profit Margin, Competitors3
ConocoPhillips -10.43% 0.05% 12.15% -2.12% -53.65%
Exxon Mobil Corp. -5.15% -0.41% 6.17% -0.12% -35.77%
Occidental Petroleum Corp. -23.33% -11.55% 10.25% -11.64% -121.07%

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 ÷ Sales and other operating revenues
= 100 × -10,858 ÷ 193,414 = -5.61%

3 Click competitor name to see calculations.

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. Chevron Corp. economic profit margin deteriorated from 2022 to 2023 but then slightly improved from 2023 to 2024.