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.
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Exxon Mobil Corp. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
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Economic Profit
Exxon Mobil 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 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- There was a significant recovery in net operating profit after taxes from 2020 to 2022, moving from a substantial negative value to a strong positive peak. Specifically, NOPAT improved from -34,098 million USD in 2020 to 62,749 million USD in 2022. After peaking in 2022, it decreased in the subsequent years, falling to 31,476 million USD by 2024, indicating some operational challenges or market pressures after the peak.
- Cost of Capital
- The cost of capital showed an upward trend throughout the period, increasing steadily from 10.88% in 2020 to 12.93% in 2024. This rise suggests an increasing risk profile or higher expected returns demanded by investors over time. The cost of capital's consistent increase may have implications on investment decisions and valuation assessments.
- Invested Capital
- Invested capital experienced a steady increase over the analyzed years, rising from 273,920 million USD in 2020 to 378,995 million USD in 2024. This growth indicates ongoing capital allocation to business operations or asset acquisitions, reflecting an expansion or reinforcement of the capital base supporting company activities.
- Economic Profit
- Economic profit, calculated as the net operating profit after taxes minus the cost of capital on invested capital, demonstrated considerable volatility. It was deeply negative (-63,912 million USD) in 2020 but improved to near breakeven (-366 million USD) in 2021, reaching a positive peak of 24,533 million USD in 2022. Following that, it reverted to negative territory in 2023 and 2024 (-1,432 million USD and -17,535 million USD respectively). This pattern indicates that while the company achieved value creation in 2022, the economic profit could not be sustained in the later periods, possibly due to increasing cost of capital and lower profitability.
Net Operating Profit after Taxes (NOPAT)
Exxon Mobil Corp., NOPAT calculation
US$ in millions
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 reserves.
3 Addition of increase (decrease) in LIFO reserve. See details »
4 Addition of increase (decrease) in restructuring reserves.
5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to ExxonMobil.
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income (loss) attributable to ExxonMobil.
The financial data reveals significant fluctuations in the profitability metrics over the five-year period ending December 31, 2024. Both net income and net operating profit after taxes (NOPAT) demonstrate notable volatility, reflecting changing business dynamics and external factors impacting the company.
- Net Income (Loss) Attributable to ExxonMobil
- The company experienced a substantial net loss in the year 2020, with a figure of negative $22.44 billion. This was followed by a strong recovery in 2021, marked by a sharp turnaround to a net income of $23.04 billion. The upward trend continued robustly into 2022, reaching a peak of $55.74 billion, which represents the highest profit in the examined period. However, the subsequent years showed a moderation in profitability, with net income declining to $36.01 billion in 2023 and further to $33.68 billion in 2024. Despite these decreases, profits remained significantly positive compared to the loss in 2020.
- Net Operating Profit After Taxes (NOPAT)
- Similar to net income, NOPAT followed a correlated pattern. The year 2020 registered a pronounced negative figure of $34.10 billion, indicating operational challenges and tax impacts during that period. Recovery commenced in 2021 with NOPAT switching to a positive $32.74 billion, followed by a peak in 2022 at $62.75 billion, surpassing the net income peak and underscoring efficient operational performance. Afterwards, NOPAT experienced a decline to $37.86 billion in 2023 and further contraction to $31.48 billion in 2024. These trends suggest the company maintained operational profitability after taxes but faced headwinds causing reduced returns post-2022.
Overall, the data indicates that the company underwent a significant turnaround after 2020, reflecting recovery from adverse conditions that year. The peak in 2022 represents a period of considerable profitability, although the subsequent decline in the following two years points to either reduced market conditions, increased costs, or other operational challenges. Despite the decline post-2022, the company remained profitable with both net income and NOPAT well above the negative values seen in 2020.
Cash Operating Taxes
Exxon Mobil Corp., cash operating taxes calculation
US$ in millions
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).
The financial data exhibits significant fluctuations in both income tax expense (benefit) and cash operating taxes over the observed five-year period.
- Income Tax Expense (Benefit)
- The income tax expense started with a substantial benefit of -5,632 million USD at the end of 2020, indicating a tax advantage or credit in that year. However, this shifted markedly in 2021, changing to a positive expense of 7,636 million USD. The upward trend continued into 2022, peaking at 20,176 million USD. Although there was a decline in 2023 to 15,429 million USD, the figure remained significantly elevated compared to 2021 and 2020. By 2024, the expense decreased slightly further to 13,810 million USD, yet maintaining a higher level than in the initial years.
- Cash Operating Taxes
- The cash operating taxes demonstrate a strong growth trajectory from 2,695 million USD in 2020 to 7,904 million USD in 2021. This upward momentum accelerated, reaching 16,789 million USD in 2022. Following this peak, cash operating taxes slightly declined to 14,713 million USD in 2023 but rebounded modestly to 14,916 million USD in 2024. The overall pattern suggests a multi-year increase with a peak in 2022, followed by stabilization at a high level.
Overall, both tax-related metrics indicate increased tax obligations and cash outflows in the recent years, especially from 2021 onwards. The simultaneous rise in income tax expense and cash operating taxes reflects heightened tax liabilities that stabilize but remain elevated compared to 2020 levels. The initial benefit observed in 2020 may represent one-time tax credits or adjustments, followed by normalization or growth in tax expenses consistent with business conditions in the subsequent years.
Invested Capital
Exxon Mobil Corp., invested capital calculation (financing approach)
US$ in millions
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 restructuring reserves.
6 Addition of equity equivalents to total ExxonMobil share of equity.
7 Removal of accumulated other comprehensive income.
- Total reported debt & leases
- The total reported debt and leases exhibit a significant downward trend from 2020 to 2022, decreasing from $72,802 million to $46,787 million. This reduction suggests a strategy of debt reduction or improved liability management. From 2022 onwards, the figure stabilizes, with a slight increase to $48,188 million by 2024, indicating a relatively steady level of debt in the most recent periods.
- Total ExxonMobil share of equity
- Shareholder equity shows a consistent upward trend over the entire period. Starting at $157,150 million in 2020, it increases steadily each year, reaching a notable $263,705 million in 2024. This growth reflects strengthening equity positions, possibly driven by retained earnings, asset appreciation, or additional capital infusion.
- Invested capital
- Invested capital remains relatively stable between 2020 and 2021, with a slight slight decline from $273,920 million to $272,673 million. From 2021 onwards, invested capital steadily rises, reaching $378,995 million in 2024. This upward trend may indicate increased investments in assets or expansion initiatives to support long-term operational growth.
Overall, the financial data indicates a strategic reduction and subsequent stabilization of debt, coupled with strong growth in shareholder equity. The increase in invested capital alongside equity growth suggests ongoing investment in operational capacity supported by a solid equity base, contributing to a potentially stronger financial position over the assessed period.
Cost of Capital
Exxon Mobil Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ 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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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
Exxon Mobil 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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
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 Click competitor name to see calculations.
- Economic Profit
- Economic profit exhibited significant volatility over the analyzed periods. Initially, it was deeply negative in 2020 at -63,912 million US$, improving dramatically to nearly break even in 2021 with a value of -366 million US$. The year 2022 marked a positive turnaround, reaching 24,533 million US$. However, in the subsequent years, economic profit declined again, turning negative at -1,432 million US$ in 2023 and further worsening to -17,535 million US$ in 2024. This pattern suggests fluctuating profitability with a notable peak in 2022 amidst otherwise negative returns.
- Invested Capital
- Invested capital showed a steady increase throughout the period under review. Starting at 273,920 million US$ in 2020, it slightly decreased to 272,673 million US$ in 2021 but rebounded to higher levels subsequently. By 2022, invested capital increased to 297,049 million US$, followed by consistent growth in 2023 and 2024, reaching 307,196 million US$ and 378,995 million US$ respectively. This upward trend indicates progressive capital deployment, possibly for business expansion or asset acquisition.
- Economic Spread Ratio
- The economic spread ratio, representing the return over invested capital relative to cost, reflected a similar fluctuating trend to economic profit. In 2020, it was significantly negative at -23.33%, improving sharply to almost zero in 2021 at -0.13%. The ratio peaked positively in 2022 at 8.26%, correlating with the high economic profit in that year. Nonetheless, the trend reversed in the last two years, with the ratio turning negative again, at -0.47% in 2023 and deteriorating further to -4.63% in 2024. These movements suggest challenges in generating returns above capital costs outside the 2022 exceptional year.
Economic Profit Margin
Exxon Mobil 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 | ||||||
| Sales and other operating revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
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 revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Sales and Other Operating Revenue
- The sales and other operating revenue showed a significant upward trend from 2020 to 2022. Starting at approximately 178.6 billion USD in 2020, it increased substantially to nearly 398.7 billion USD by 2022, representing strong growth in top-line performance. However, after peaking in 2022, revenue declined in 2023 to about 334.7 billion USD and remained relatively stable with a slight increase to 339.2 billion USD in 2024. This pattern suggests a period of rapid growth followed by a correction or stabilization in recent years.
- Economic Profit
- The economic profit fluctuated considerably across the observed years. In 2020, the company experienced a substantial economic loss of about 63.9 billion USD. This loss sharply contracted to a near-break-even point of -366 million USD in 2021, indicating improved operational efficiency or cost management. In 2022, economic profit turned positive, reaching 24.5 billion USD, which marks the strongest year in economic value creation within the period. However, this improvement reversed in the following years, with losses of 1.4 billion USD in 2023 and a larger loss of 17.5 billion USD in 2024. These fluctuations suggest volatility in economic profitability, with a peak in 2022 before declining again.
- Economic Profit Margin
- The economic profit margin mirrored the economic profit’s trend, beginning with a significant negative margin of -35.79% in 2020. This margin improved drastically to nearly neutral (-0.13%) in 2021 and turned positive to 6.15% in 2022, indicating that the company was generating economic value relative to its sales during that year. However, the margin deteriorated in subsequent years to -0.43% in 2023 and further to -5.17% in 2024. This decline reinforces the indication of worsening profitability despite stable revenues post-2022.
- Overall Insights
- The data reflects a period of sharp improvement in economic profitability culminating in 2022, associated with significant revenue growth. Despite the strong performance in 2022, subsequent years show a reversal in profitability while revenues remain relatively high but stable. This suggests increased costs, reduced operational efficiency, or other factors negatively impacting economic profit despite solid sales figures. The volatility in economic profit and margin highlights potential risks or challenges in sustaining value generation under current operational or market conditions.