Economic Value Added (EVA)
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
Coca-Cola Co., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 14,042 – 8.99% × 92,902 = 5,688
The analysis of economic profit from 2021 to 2025 reveals a period of fluctuating value creation, characterized by a decline in efficiency between 2021 and 2024, followed by a substantial recovery in 2025. Throughout the entire period, the organization consistently generated positive economic profit, indicating that net operating profit after taxes (NOPAT) remained above the cost of capital charge.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a non-linear trend, starting at 11,202 million US$ in 2021 and dropping to 10,120 million US$ in 2022. A period of gradual recovery followed in 2023 and 2024, before a significant surge to 14,042 million US$ was recorded in 2025, representing the peak operating performance for the period.
- Cost of Capital
- A consistent upward trajectory is observed in the cost of capital, which rose steadily from 8.57% in 2021 to 8.99% in 2025. This incremental increase indicates a rising hurdle rate, meaning the company required higher operating returns to maintain the same level of economic value added over time.
- Invested Capital
- Invested capital remained relatively stable in 2022 but entered a growth phase from 2023 onward. The capital base expanded from 80,311 million US$ in 2021 to 92,902 million US$ by 2025. This expansion indicates increased investment in the business, which, when coupled with the rising cost of capital, exerted downward pressure on economic profit until the operating gains of 2025.
- Economic Profit Performance
- Economic profit experienced a contraction from 4,321 million US$ in 2021 to 3,181 million US$ in 2024. This decline was driven by a combination of stagnant NOPAT and an increasing capital charge. However, 2025 marked a significant inflection point, with economic profit rising to 5,688 million US$, as the growth in NOPAT substantially outpaced the increase in both invested capital and the cost of capital.
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Net Operating Profit after Taxes (NOPAT)
Coca-Cola Co., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowances.
3 Addition of increase (decrease) in accrued expenses related to restructuring.
4 Addition of increase (decrease) in equity equivalents to net income attributable to shareowners of The Coca-Cola Company.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,722 × 3.90% = 67
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,721 × 21.00% = 361
7 Addition of after taxes interest expense to net income attributable to shareowners of The Coca-Cola Company.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,215 × 21.00% = 255
9 Elimination of after taxes investment income.
Net income attributable to shareowners and net operating profit after taxes (NOPAT) exhibited distinct patterns over the five-year period. While net income experienced fluctuations, NOPAT demonstrated a generally positive trajectory, particularly in the later years.
- NOPAT Trend
- NOPAT decreased from US$11,202 million in 2021 to US$10,120 million in 2022, representing a decline of approximately 9.6%. This was followed by a period of relative stability, with NOPAT reaching US$10,884 million in 2023 and US$10,945 million in 2024. A significant increase is then observed in 2025, with NOPAT rising to US$14,042 million. This represents a substantial year-over-year growth of approximately 28.3% from 2024.
- Net Income Trend
- Net income attributable to shareowners decreased from US$9,771 million in 2021 to US$9,542 million in 2022, a decrease of approximately 2.4%. It then increased to US$10,714 million in 2023, followed by a slight decrease to US$10,631 million in 2024. A notable increase occurred in 2025, with net income reaching US$13,107 million, representing a 23.3% increase from 2024.
- Relationship between NOPAT and Net Income
- While both metrics generally trended upwards from 2022 to 2025, NOPAT consistently exceeded net income attributable to shareowners throughout the observed period. The difference between the two metrics suggests the presence of significant non-operating items or differences in accounting treatment impacting reported net income. The larger increase in NOPAT in 2025, compared to net income, further emphasizes this divergence.
The observed increase in both NOPAT and net income in 2025 warrants further investigation to determine the underlying drivers of this growth. The initial decline in NOPAT in 2022 also merits attention to understand the contributing factors and whether they represent a temporary fluctuation or a more persistent issue.
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Cash Operating Taxes
Coca-Cola Co., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
The reported income taxes and cash operating taxes exhibit distinct patterns over the five-year period. Income taxes generally increased, while cash operating taxes demonstrated more fluctuation.
- Income Taxes
- Income taxes decreased from US$2,621 million in 2021 to US$2,115 million in 2022, representing a notable decline. Subsequently, income taxes increased each year, reaching US$2,861 million in 2025. This indicates a consistent upward trend in reported income taxes following the initial decrease.
- Cash Operating Taxes
- Cash operating taxes increased significantly from US$1,907 million in 2021 to US$2,414 million in 2022. This was followed by a slight decrease to US$2,314 million in 2023. Further increases were observed in 2024, reaching US$2,529 million, before a modest decline to US$2,450 million in 2025. The pattern suggests a generally higher level of cash taxes compared to the earlier period, with some year-to-year variability.
- Relationship between Income Taxes and Cash Operating Taxes
- While both metrics generally trended upwards over the period, cash operating taxes were consistently lower than reported income taxes in each year. The difference between the two varied, but suggests the presence of timing differences or non-cash tax items impacting the reported income tax expense. The gap narrowed in 2022 and 2023, then widened again in 2024 and 2025.
The fluctuations in cash operating taxes may warrant further investigation to understand the underlying drivers, such as changes in tax credits, deferred tax assets/liabilities, or tax planning strategies. The increasing trend in income taxes, despite the variability in cash taxes, suggests a growing tax burden overall.
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Invested Capital
Coca-Cola Co., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
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 accrued expenses related to restructuring.
5 Addition of equity equivalents to equity attributable to shareowners of The Coca-Cola Company.
6 Removal of accumulated other comprehensive income.
7 Subtraction of marketable securities.
The reported invested capital exhibited an overall increasing trend throughout the observed period. While fluctuations occurred, the company consistently reinvested in its operations, as reflected in the growth of invested capital from 2021 to 2025.
- Total Reported Debt & Leases
- Total reported debt and leases decreased from US$44,232 million in 2021 to US$40,603 million in 2022, indicating a reduction in financial leverage. However, debt levels subsequently increased, reaching US$47,214 million by 2025. This suggests a renewed reliance on debt financing in later years, potentially to fund expansion or acquisitions.
- Equity Attributable to Shareowners
- Equity attributable to shareowners demonstrated growth from US$22,999 million in 2021 to US$25,941 million in 2023. A slight decrease was observed in 2024, falling to US$24,856 million, before a substantial increase to US$32,169 million in 2025. This indicates strengthening shareholder equity, with a particularly significant boost in the final year of the period.
- Invested Capital
- Invested capital remained relatively stable between 2021 and 2022, fluctuating around US$80 billion. A noticeable increase occurred in 2023, reaching US$83,542 million, and continued upward through 2025, culminating in US$92,902 million. This consistent growth suggests ongoing investment in the business, potentially through a combination of debt and equity financing. The increase in invested capital outpaced the growth in equity during the latter part of the period, indicating a greater reliance on debt to fund these investments.
The interplay between debt and equity in financing invested capital warrants further investigation. The increasing debt levels alongside growing invested capital suggest a potential shift in the company’s capital structure. The substantial increase in equity in 2025 may indicate successful profitability or strategic financial maneuvers.
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Cost of Capital
Coca-Cola Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 343,370) | 343,370) | ÷ | 386,028) | = | 0.89 | 0.89 | × | 9.78% | = | 8.70% | ||
| Debt3 | 40,936) | 40,936) | ÷ | 386,028) | = | 0.11 | 0.11 | × | 3.32% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 1,722) | 1,722) | ÷ | 386,028) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 386,028) | 1.00 | 8.99% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | 301,242) | 301,242) | ÷ | 342,006) | = | 0.88 | 0.88 | × | 9.78% | = | 8.62% | ||
| Debt3 | 39,551) | 39,551) | ÷ | 342,006) | = | 0.12 | 0.12 | × | 3.44% × (1 – 21.00%) | = | 0.31% | ||
| Operating lease liability4 | 1,213) | 1,213) | ÷ | 342,006) | = | 0.00 | 0.00 | × | 3.70% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 342,006) | 1.00 | 8.94% | ||||||||||
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 | 261,766) | 261,766) | ÷ | 301,130) | = | 0.87 | 0.87 | × | 9.78% | = | 8.50% | ||
| Debt3 | 38,002) | 38,002) | ÷ | 301,130) | = | 0.13 | 0.13 | × | 3.59% × (1 – 21.00%) | = | 0.36% | ||
| Operating lease liability4 | 1,362) | 1,362) | ÷ | 301,130) | = | 0.00 | 0.00 | × | 3.40% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 301,130) | 1.00 | 8.87% | ||||||||||
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 | 258,736) | 258,736) | ÷ | 295,261) | = | 0.88 | 0.88 | × | 9.78% | = | 8.57% | ||
| Debt3 | 35,071) | 35,071) | ÷ | 295,261) | = | 0.12 | 0.12 | × | 2.40% × (1 – 21.00%) | = | 0.23% | ||
| Operating lease liability4 | 1,454) | 1,454) | ÷ | 295,261) | = | 0.00 | 0.00 | × | 2.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 295,261) | 1.00 | 8.81% | ||||||||||
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 | 270,013) | 270,013) | ÷ | 315,102) | = | 0.86 | 0.86 | × | 9.78% | = | 8.38% | ||
| Debt3 | 43,618) | 43,618) | ÷ | 315,102) | = | 0.14 | 0.14 | × | 1.61% × (1 – 21.00%) | = | 0.18% | ||
| Operating lease liability4 | 1,471) | 1,471) | ÷ | 315,102) | = | 0.00 | 0.00 | × | 2.70% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 315,102) | 1.00 | 8.57% | ||||||||||
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 »
Economic Spread Ratio
Coca-Cola Co., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 5,688) | 3,181) | 3,472) | 3,078) | 4,321) | |
| Invested capital2 | 92,902) | 86,857) | 83,542) | 79,959) | 80,311) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 6.12% | 3.66% | 4.16% | 3.85% | 5.38% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Mondelēz International Inc. | -3.61% | 0.21% | 0.06% | -3.76% | -0.75% | |
| PepsiCo Inc. | 2.88% | 5.47% | 4.39% | 4.37% | 4.92% | |
| Philip Morris International Inc. | 13.29% | 8.31% | 8.97% | 11.92% | 26.25% | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 5,688 ÷ 92,902 = 6.12%
4 Click competitor name to see calculations.
The analysis of economic value added reveals a period of volatility in value creation followed by a substantial recovery in capital efficiency. While the capital base expanded steadily, the ability to generate economic profit fluctuated before achieving a five-year peak in the final observed year.
- Invested Capital Growth
- A consistent upward trajectory in invested capital is observed starting from 2022. After a slight decrease from US$ 80,311 million in 2021 to US$ 79,959 million in 2022, the capital base grew steadily each year, reaching US$ 92,902 million by December 31, 2025. This indicates a continuous increase in the total assets deployed to generate returns.
- Economic Profit Volatility
- Economic profit demonstrated significant fluctuations between 2021 and 2024, falling from US$ 4,321 million to a low of US$ 3,078 million in 2022, and remaining unstable through 2024. However, a sharp reversal occurred in 2025, with economic profit increasing to US$ 5,688 million, marking the highest value within the analyzed timeframe.
- Economic Spread Ratio Performance
- The economic spread ratio experienced a general decline from 5.38% in 2021 to a period low of 3.66% in 2024, suggesting a compression in the excess return generated over the cost of capital. This trend was broken in 2025, where the ratio surged to 6.12%. The correlation between the rising economic profit and the increasing invested capital in 2025 resulted in a significant expansion of the spread, indicating enhanced capital efficiency and superior value creation relative to the cost of funding.
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Economic Profit Margin
Coca-Cola Co., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 5,688) | 3,181) | 3,472) | 3,078) | 4,321) | |
| Net operating revenues | 47,941) | 47,061) | 45,754) | 43,004) | 38,655) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 11.86% | 6.76% | 7.59% | 7.16% | 11.18% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Mondelēz International Inc. | -5.77% | 0.34% | 0.10% | -7.62% | -1.61% | |
| PepsiCo Inc. | 2.55% | 4.57% | 3.60% | 3.51% | 4.32% | |
| Philip Morris International Inc. | 17.43% | 10.60% | 13.10% | 17.77% | 24.37% | |
Based on: 10-K (reporting date: 2025-12-31), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Net operating revenues
= 100 × 5,688 ÷ 47,941 = 11.86%
3 Click competitor name to see calculations.
The financial performance from 2021 to 2025 is characterized by consistent growth in net operating revenues contrasted with volatility in economic profit and its associated margin. While the top line expanded steadily throughout the period, the efficiency of value creation experienced a notable decline before achieving a significant peak in the final year.
- Net Operating Revenues Trend
- A continuous upward trajectory is observed in net operating revenues, which grew from 38,655 million USD in 2021 to 47,941 million USD by 2025. This consistent growth indicates a steady expansion of the company's operational scale over the five-year period.
- Economic Profit Performance
- Economic profit exhibited significant fluctuation. After an initial decrease from 4,321 million USD in 2021 to 3,078 million USD in 2022, the figure remained relatively unstable, ending 2024 at 3,181 million USD. However, a substantial increase is recorded in 2025, with economic profit rising to 5,688 million USD, the highest level within the analyzed timeframe.
- Economic Profit Margin Analysis
- The economic profit margin followed a U-shaped pattern. Starting at 11.18% in 2021, the margin contracted sharply to 7.16% in 2022 and reached a period low of 6.76% in 2024. This compression suggests that during these years, the cost of capital or operational expenses grew at a rate that outpaced the generation of economic value. This trend reversed aggressively in 2025, with the margin expanding to 11.86%, signaling a strong recovery in the company's ability to generate value above its required return.
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