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 – 8.68% × 92,902 = 5,976
The period under review demonstrates fluctuating economic profit alongside changes in underlying financial components. Net operating profit after taxes (NOPAT) initially decreased before exhibiting substantial growth, while the cost of capital consistently increased. Invested capital also showed an overall upward trend, though not consistently year-over-year. These movements collectively influenced the observed economic profit performance.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT experienced a decline from US$11,202 million in 2021 to US$10,120 million in 2022. A recovery was then observed in 2023, reaching US$10,884 million, followed by a modest increase to US$10,945 million in 2024. A significant increase is noted in 2025, with NOPAT reaching US$14,042 million. This suggests improving operational efficiency or revenue generation in the later years of the period.
- Cost of Capital
- The cost of capital steadily increased throughout the period, rising from 8.27% in 2021 to 8.68% in 2025. This consistent increase reflects potentially changing market conditions, increased risk perception, or shifts in the company’s capital structure. The incremental increases are relatively small each year, but cumulative over the period.
- Invested Capital
- Invested capital decreased slightly from US$80,311 million in 2021 to US$79,959 million in 2022. Subsequent years show growth, reaching US$83,542 million in 2023, US$86,857 million in 2024, and US$92,902 million in 2025. This indicates ongoing investment in the business, potentially supporting the growth in NOPAT observed in later years.
- Economic Profit
- Economic profit mirrored the fluctuations in NOPAT and the increasing cost of capital. It decreased from US$4,561 million in 2021 to US$3,322 million in 2022. A recovery to US$3,724 million occurred in 2023, followed by a slight decrease to US$3,447 million in 2024. The most substantial increase is observed in 2025, with economic profit reaching US$5,976 million. This final value represents the highest economic profit achieved during the analyzed period, driven by the significant increase in NOPAT.
The interplay between NOPAT, cost of capital, and invested capital demonstrates a complex relationship. While the cost of capital consistently rose, the substantial growth in NOPAT in 2025 ultimately led to a significant improvement in economic profit, suggesting effective capital allocation and operational performance in that year.
Net Operating Profit after Taxes (NOPAT)
Coca-Cola Co., NOPAT calculation
US$ 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$13,107 million, representing a 23.3% increase from 2024.
- Relationship between NOPAT and Net Income
- While both metrics generally trended upwards from 2022 to 2025, NOPAT consistently exceeded net income attributable to shareowners throughout the observed period. The difference between the two metrics suggests the presence of significant non-operating items or differences in accounting treatment impacting reported net income. The larger increase in NOPAT in 2025, compared to net income, further emphasizes this divergence.
The observed increase in both NOPAT and net income in 2025 warrants further investigation to determine the underlying drivers of this growth. The initial decline in NOPAT in 2022 also merits attention to understand the contributing factors and whether they represent a temporary fluctuation or a more persistent issue.
Cash Operating Taxes
Coca-Cola Co., cash operating taxes calculation
US$ 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$2,450 million in 2025. The pattern suggests a generally higher level of cash taxes compared to the earlier period, with some year-to-year variability.
- Relationship between Income Taxes and Cash Operating Taxes
- While both metrics generally trended upwards over the period, cash operating taxes were consistently lower than reported income taxes in each year. The difference between the two varied, but suggests the presence of timing differences or non-cash tax items impacting the reported income tax expense. The gap narrowed in 2022 and 2023, then widened again in 2024 and 2025.
The fluctuations in cash operating taxes may warrant further investigation to understand the underlying drivers, such as changes in tax credits, deferred tax assets/liabilities, or tax planning strategies. The increasing trend in income taxes, despite the variability in cash taxes, suggests a growing tax burden overall.
Invested Capital
Coca-Cola Co., invested capital calculation (financing approach)
US$ 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$92,902 million. This consistent growth suggests ongoing investment in the business, potentially through a combination of debt and equity financing. The increase in invested capital outpaced the growth in equity during the latter part of the period, indicating a greater reliance on debt to fund these investments.
The interplay between debt and equity in financing invested capital warrants further investigation. The increasing debt levels alongside growing invested capital suggest a potential shift in the company’s capital structure. The substantial increase in equity in 2025 may indicate successful profitability or strategic financial maneuvers.
Cost of Capital
Coca-Cola Co., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 343,370) | 343,370) | ÷ | 386,028) | = | 0.89 | 0.89 | × | 9.43% | = | 8.39% | ||
| Debt3 | 40,936) | 40,936) | ÷ | 386,028) | = | 0.11 | 0.11 | × | 3.32% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 1,722) | 1,722) | ÷ | 386,028) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 386,028) | 1.00 | 8.68% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ 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 | × | 9.43% | = | 8.31% | ||
| 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 | 8.63% | ||||||||||
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 | × | 9.43% | = | 8.20% | ||
| 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 | 8.57% | ||||||||||
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 | × | 9.43% | = | 8.27% | ||
| 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 | 8.50% | ||||||||||
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 | × | 9.43% | = | 8.08% | ||
| 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 | 8.27% | ||||||||||
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 | 5,976) | 3,447) | 3,724) | 3,322) | 4,561) | |
| Invested capital2 | 92,902) | 86,857) | 83,542) | 79,959) | 80,311) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 6.43% | 3.97% | 4.46% | 4.15% | 5.68% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Mondelēz International Inc. | -3.35% | 0.49% | 0.35% | -3.48% | -0.47% | |
| PepsiCo Inc. | 3.16% | 5.74% | 4.67% | 4.66% | 5.20% | |
| Philip Morris International Inc. | 13.58% | 8.60% | 9.22% | 12.19% | 26.54% | |
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 × 5,976 ÷ 92,902 = 6.43%
4 Click competitor name to see calculations.
The economic spread ratio exhibited fluctuations over the five-year period. Initial values decreased before recovering to a peak in the final year. Economic profit demonstrated a similar pattern of decline and subsequent growth, while invested capital generally increased throughout the period.
- Economic Spread Ratio
- The economic spread ratio began at 5.68% in 2021, indicating a relatively strong return on invested capital exceeding the cost of capital. A decline was observed in 2022, falling to 4.15%, and continued modestly in 2023 to 4.46%. The ratio then decreased further in 2024 to 3.97%, representing the lowest value within the observed timeframe. A significant increase occurred in 2025, with the ratio rising to 6.43%, suggesting improved profitability relative to invested capital.
- Economic Profit
- Economic profit started at US$4,561 million in 2021. It decreased to US$3,322 million in 2022, and then showed a modest recovery to US$3,724 million in 2023. A slight decrease was noted in 2024, with economic profit at US$3,447 million. The final year, 2025, saw a substantial increase, reaching US$5,976 million, aligning with the increase in the economic spread ratio.
- Invested Capital
- Invested capital demonstrated a consistent upward trend throughout the period. Starting at US$80,311 million in 2021, it decreased slightly to US$79,959 million in 2022. Subsequent years showed increases, reaching US$83,542 million in 2023, US$86,857 million in 2024, and culminating in US$92,902 million in 2025. This indicates a continuous reinvestment of capital into the business.
The combination of increasing invested capital and fluctuating economic profit resulted in the observed changes in the economic spread ratio. The substantial increase in both economic profit and the economic spread ratio in 2025 suggests a period of enhanced value creation.
Economic Profit Margin
Coca-Cola Co., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | 5,976) | 3,447) | 3,724) | 3,322) | 4,561) | |
| Net operating revenues | 47,941) | 47,061) | 45,754) | 43,004) | 38,655) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 12.47% | 7.32% | 8.14% | 7.72% | 11.80% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Mondelēz International Inc. | -5.34% | 0.80% | 0.59% | -7.06% | -1.02% | |
| PepsiCo Inc. | 2.80% | 4.79% | 3.83% | 3.74% | 4.57% | |
| Philip Morris International Inc. | 17.81% | 10.96% | 13.47% | 18.17% | 24.64% | |
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 × 5,976 ÷ 47,941 = 12.47%
3 Click competitor name to see calculations.
The economic profit margin exhibited fluctuations over the five-year period. Initial values decreased before recovering to surpass the original level. Economic profit itself also demonstrated volatility, mirroring the changes observed in the margin.
- Economic Profit Margin
- The economic profit margin began at 11.80% in 2021. A substantial decrease was noted in 2022, falling to 7.72%. This downward trend continued, albeit at a slower pace, with the margin reaching 8.14% in 2023 and 7.32% in 2024. A significant increase occurred in 2025, with the economic profit margin rising to 12.47%, exceeding the initial value from 2021.
- Economic Profit
- Economic profit started at US$4,561 million in 2021. It decreased to US$3,322 million in 2022, then increased to US$3,724 million in 2023. A slight decline to US$3,447 million was observed in 2024. Finally, economic profit experienced a considerable increase, reaching US$5,976 million in 2025.
The relationship between net operating revenues and economic profit margin suggests that revenue growth alone did not drive the margin improvements. The substantial margin increase in 2025 occurred with a relatively modest increase in net operating revenues, indicating improved profitability beyond simply scaling operations. The dip in margin between 2021 and 2024, despite increasing revenues, suggests potential increases in the cost of capital or operational expenses that offset revenue gains.
Overall, the period demonstrates a recovery in profitability as measured by economic profit margin, culminating in a performance level exceeding that of the initial year. The volatility observed warrants further investigation into the underlying drivers of both revenue and cost structures.