Stock Analysis on Net

DuPont de Nemours Inc. (NYSE:DD)

This company has been moved to the archive! The financial data has not been updated since February 14, 2020.

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

DuPont de Nemours Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net operating profit after taxes (NOPAT)1 (572) 4,932 2,498 3,846 8,206
Cost of capital2 19.25% 14.59% 17.08% 14.99% 13.76%
Invested capital3 62,770 153,164 149,192 50,610 46,288
 
Economic profit4 (12,654) (17,423) (22,990) (3,740) 1,836

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2019 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -57219.25% × 62,770 = -12,654

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. DuPont de Nemours Inc. economic profit increased from 2017 to 2018 and from 2018 to 2019.

Net Operating Profit after Taxes (NOPAT)

DuPont de Nemours Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income attributable to DuPont 498 3,844 1,460 4,318 7,685
Deferred income tax expense (benefit)1 (478) (434) (2,166) (1,259) 305
Increase (decrease) in allowance for doubtful receivables2 (1) 64 17 16 (16)
Increase (decrease) in LIFO reserve3 118 (269) 45 (561)
Increase (decrease) in deferred revenue4 (41) 2,332
Increase (decrease) in restructuring reserve5 20 96 307 128 108
Increase (decrease) in equity equivalents6 (459) (197) 221 (1,070) (164)
Interest expense 668 1,504 1,082 858 946
Interest expense, operating lease liability7 23 121 110 92 110
Adjusted interest expense 691 1,625 1,192 950 1,056
Tax benefit of interest expense8 (145) (341) (417) (333) (370)
Adjusted interest expense, after taxes9 546 1,283 775 618 687
(Gain) loss on marketable securities (1) 9 (110) (56) (82)
Interest income (55) (210) (147) (107) (71)
Investment income, before taxes (56) (201) (257) (163) (153)
Tax expense (benefit) of investment income10 12 42 90 57 54
Investment income, after taxes11 (44) (159) (167) (106) (99)
(Income) loss from discontinued operations, net of tax12 (1,214) 5 77
Net income (loss) attributable to noncontrolling interest 102 155 132 86 98
Net operating profit after taxes (NOPAT) (572) 4,932 2,498 3,846 8,206

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for doubtful receivables.

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

4 Addition of increase (decrease) in deferred revenue.

5 Addition of increase (decrease) in restructuring reserve.

6 Addition of increase (decrease) in equity equivalents to net income attributable to DuPont.

7 2019 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 554 × 4.07% = 23

8 2019 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 691 × 21.00% = 145

9 Addition of after taxes interest expense to net income attributable to DuPont.

10 2019 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 56 × 21.00% = 12

11 Elimination of after taxes investment income.

12 Elimination of discontinued operations.

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. DuPont de Nemours Inc. NOPAT increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Cash Operating Taxes

DuPont de Nemours Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Provision for (benefit from) income taxes on continuing operations 140 1,489 (476) 9 2,147
Less: Deferred income tax expense (benefit) (478) (434) (2,166) (1,259) 305
Add: Tax savings from interest expense 145 341 417 333 370
Less: Tax imposed on investment income 12 42 90 57 54
Cash operating taxes 751 2,222 2,017 1,544 2,158

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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. DuPont de Nemours Inc. cash operating taxes increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Invested Capital

DuPont de Nemours Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Short-term borrowings and finance lease obligations 3,830 2,802 4,015 907 995
Long-term debt, excluding debt within one year 13,617 37,662 30,056 20,456 16,215
Operating lease liability1 554 2,777 2,836 1,967 2,040
Total reported debt & leases 18,001 43,241 36,907 23,330 19,250
Total DuPont stockholders’ equity 40,987 94,571 100,330 25,987 25,374
Net deferred tax (assets) liabilities2 3,278 3,711 4,397 (2,156) (1,846)
Allowance for doubtful receivables3 9 191 127 110 94
LIFO reserve4 (98) (216) 53 8
Deferred revenue5 2,565 2,606
Restructuring reserve6 162 684 588 281 153
Equity equivalents7 3,449 7,053 7,502 (1,712) (1,591)
Accumulated other comprehensive (income) loss, net of tax8 1,416 12,394 8,972 9,822 8,667
Non-redeemable noncontrolling interests 569 1,608 1,597 1,242 809
Adjusted total DuPont stockholders’ equity 46,421 115,626 118,401 35,339 33,259
Construction in progress9 (1,652) (3,870) (4,600) (6,100) (4,355)
Marketable securities10 (1,833) (1,516) (1,959) (1,866)
Invested capital 62,770 153,164 149,192 50,610 46,288

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

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 deferred revenue.

6 Addition of restructuring reserve.

7 Addition of equity equivalents to total DuPont stockholders’ equity.

8 Removal of accumulated other comprehensive income.

9 Subtraction of construction in progress.

10 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. DuPont de Nemours Inc. invested capital increased from 2017 to 2018 but then decreased significantly from 2018 to 2019.

Cost of Capital

DuPont de Nemours Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 39,262 39,262 ÷ 58,866 = 0.67 0.67 × 27.25% = 18.18%
Preferred stock, series A, $1.00 par (book value) ÷ 58,866 = 0.00 0.00 × 0.00% = 0.00%
Short-term borrowings and long-term debt3 19,050 19,050 ÷ 58,866 = 0.32 0.32 × 4.07% × (1 – 21.00%) = 1.04%
Operating lease liability4 554 554 ÷ 58,866 = 0.01 0.01 × 4.07% × (1 – 21.00%) = 0.03%
Total: 58,866 1.00 19.25%

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

1 US$ in millions

2 Equity. See details »

3 Short-term borrowings and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 39,083 39,083 ÷ 83,391 = 0.47 0.47 × 27.25% = 12.77%
Preferred stock, series A, $1.00 par (book value) ÷ 83,391 = 0.00 0.00 × 0.00% = 0.00%
Short-term borrowings and long-term debt3 41,531 41,531 ÷ 83,391 = 0.50 0.50 × 4.34% × (1 – 21.00%) = 1.71%
Operating lease liability4 2,777 2,777 ÷ 83,391 = 0.03 0.03 × 4.34% × (1 – 21.00%) = 0.11%
Total: 83,391 1.00 14.59%

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

1 US$ in millions

2 Equity. See details »

3 Short-term borrowings and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 55,780 55,780 ÷ 94,739 = 0.59 0.59 × 27.25% = 16.05%
Preferred stock, series A, $1.00 par (book value) ÷ 94,739 = 0.00 0.00 × 0.00% = 0.00%
Short-term borrowings and long-term debt3 36,123 36,123 ÷ 94,739 = 0.38 0.38 × 3.88% × (1 – 35.00%) = 0.96%
Operating lease liability4 2,836 2,836 ÷ 94,739 = 0.03 0.03 × 3.88% × (1 – 35.00%) = 0.08%
Total: 94,739 1.00 17.08%

Based on: 10-K (reporting date: 2017-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term borrowings and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 24,371 24,371 ÷ 49,418 = 0.49 0.49 × 27.25% = 13.44%
Preferred stock, series A, $1.00 par (book value) ÷ 49,418 = 0.00 0.00 × 8.50% = 0.00%
Short-term borrowings and long-term debt3 23,079 23,079 ÷ 49,418 = 0.47 0.47 × 4.70% × (1 – 35.00%) = 1.43%
Operating lease liability4 1,967 1,967 ÷ 49,418 = 0.04 0.04 × 4.70% × (1 – 35.00%) = 0.12%
Total: 49,418 1.00 14.99%

Based on: 10-K (reporting date: 2016-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term borrowings and long-term debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 17,133 17,133 ÷ 41,627 = 0.41 0.41 × 27.25% = 11.22%
Preferred stock, series A, $1.00 par (book value) 4,000 4,000 ÷ 41,627 = 0.10 0.10 × 8.50% = 0.82%
Short-term borrowings and long-term debt3 18,454 18,454 ÷ 41,627 = 0.44 0.44 × 5.40% × (1 – 35.00%) = 1.56%
Operating lease liability4 2,040 2,040 ÷ 41,627 = 0.05 0.05 × 5.40% × (1 – 35.00%) = 0.17%
Total: 41,627 1.00 13.76%

Based on: 10-K (reporting date: 2015-12-31).

1 US$ in millions

2 Equity. See details »

3 Short-term borrowings and long-term debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

DuPont de Nemours Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Economic profit1 (12,654) (17,423) (22,990) (3,740) 1,836
Invested capital2 62,770 153,164 149,192 50,610 46,288
Performance Ratio
Economic spread ratio3 -20.16% -11.38% -15.41% -7.39% 3.97%
Benchmarks
Economic Spread Ratio, Competitors4
Linde plc -8.54%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 Economic profit. See details »

2 Invested capital. See details »

3 2019 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -12,654 ÷ 62,770 = -20.16%

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. DuPont de Nemours Inc. economic spread ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Economic Profit Margin

DuPont de Nemours Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Economic profit1 (12,654) (17,423) (22,990) (3,740) 1,836
 
Net sales 21,512 85,977 62,484 48,158 48,778
Add: Increase (decrease) in deferred revenue (41) 2,332
Adjusted net sales 21,512 85,936 64,816 48,158 48,778
Performance Ratio
Economic profit margin2 -58.82% -20.27% -35.47% -7.77% 3.76%
Benchmarks
Economic Profit Margin, Competitors3
Linde plc -23.76%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

1 Economic profit. See details »

2 2019 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -12,654 ÷ 21,512 = -58.82%

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. DuPont de Nemours Inc. economic profit margin improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.