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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

IQVIA Holdings Inc., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net operating profit after taxes (NOPAT)¹	1,268)	1,678)	718)	449)	444)
Cost of capital²	14.06%	13.83%	13.27%	13.15%	13.12%
Invested capital³	21,926)	21,241)	21,108)	20,313)	20,458)

Economic profit⁴	(1,814)	(1,260)	(2,083)	(2,222)	(2,239)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 1,268 – 14.06% × 21,926 = -1,814

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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.	IQVIA Holdings Inc. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

IQVIA Holdings Inc., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income attributable to IQVIA Holdings Inc.	1,091)	966)	279)	191)	259)
Deferred income tax expense (benefit)¹	(122)	(146)	(172)	(143)	(191)
Increase (decrease) in allowance for doubtful accounts²	3)	(1)	18)	1)	—)
Increase (decrease) in unearned income³	(28)	573)	238)	7)	22)
Increase (decrease) in restructuring reserve⁴	(4)	(23)	(14)	(7)	(10)
Increase (decrease) in equity equivalents⁵	(151)	403)	70)	(142)	(179)
Interest expense	416)	375)	416)	447)	414)
Interest expense, operating lease liability⁶	12)	15)	20)	23)	23)
Adjusted interest expense	428)	390)	436)	470)	437)
Tax benefit of interest expense⁷	(90)	(82)	(92)	(99)	(92)
Adjusted interest expense, after taxes⁸	338)	308)	344)	371)	345)
Interest income	(13)	(6)	(6)	(9)	(8)
Investment income, before taxes	(13)	(6)	(6)	(9)	(8)
Tax expense (benefit) of investment income⁹	3)	1)	1)	2)	2)
Investment income, after taxes¹⁰	(10)	(5)	(5)	(7)	(6)
Net income (loss) attributable to noncontrolling interest	—)	5)	29)	36)	25)
Net operating profit after taxes (NOPAT)	1,268)	1,678)	718)	449)	444)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Elimination of deferred tax expense. See details »

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

³ Addition of increase (decrease) in unearned income.

⁴ Addition of increase (decrease) in restructuring reserve.

⁵ Addition of increase (decrease) in equity equivalents to net income attributable to IQVIA Holdings Inc..

⁶ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 375 × 3.12% = 12

⁷ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 428 × 21.00% = 90

⁸ Addition of after taxes interest expense to net income attributable to IQVIA Holdings Inc..

⁹ 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 13 × 21.00% = 3

¹⁰ Elimination of after taxes investment income.

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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.	IQVIA Holdings Inc. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

IQVIA Holdings Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Income tax expense	260)	163)	72)	116)	59)
Less: Deferred income tax expense (benefit)	(122)	(146)	(172)	(143)	(191)
Add: Tax savings from interest expense	90)	82)	92)	99)	92)
Less: Tax imposed on investment income	3)	1)	1)	2)	2)
Cash operating taxes	469)	390)	334)	356)	340)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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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.	IQVIA Holdings Inc. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

IQVIA Holdings Inc., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Current portion of long-term debt	152)	91)	149)	100)	100)
Current finance lease liabilities	5)	9)	—)	—)	—)
Long-term debt, less current portion	12,595)	12,034)	12,384)	11,545)	10,907)
Long-term finance lease liabilities	224)	177)	122)	—)	—)
Operating lease liability¹	375)	453)	527)	549)	613)
Total reported debt & leases	13,351)	12,764)	13,182)	12,194)	11,620)
Equity attributable to IQVIA Holdings Inc.’s stockholders	5,765)	6,042)	6,001)	6,003)	6,714)
Net deferred tax (assets) liabilities²	346)	286)	224)	527)	627)
Allowance for doubtful accounts³	36)	33)	34)	16)	15)
Unearned income⁴	1,797)	1,825)	1,252)	1,014)	1,007)
Restructuring reserve⁵	26)	30)	53)	67)	74)
Equity equivalents⁶	2,205)	2,174)	1,563)	1,624)	1,723)
Accumulated other comprehensive (income) loss, net of tax⁷	727)	406)	205)	311)	224)
Non-controlling interests	—)	—)	279)	260)	240)
Adjusted equity attributable to IQVIA Holdings Inc.’s stockholders	8,697)	8,622)	8,048)	8,198)	8,901)
Marketable securities⁸	(122)	(145)	(122)	(79)	(63)
Invested capital	21,926)	21,241)	21,108)	20,313)	20,458)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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 unearned income.

⁵ Addition of restructuring reserve.

⁶ Addition of equity equivalents to equity attributable to IQVIA Holdings Inc.’s stockholders.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of marketable securities.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	IQVIA Holdings Inc. invested capital increased from 2020 to 2021 and from 2021 to 2022.

IQVIA Holdings Inc., cost of capital calculations

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	42,165)	42,165)	÷	55,050)	=	0.77	0.77	×	17.28%	=	13.23%
Long-term debt and finance lease liabilities³	12,510)	12,510)	÷	55,050)	=	0.23	0.23	×	4.48% × (1 – 21.00%)	=	0.80%
Operating lease liability⁴	375)	375)	÷	55,050)	=	0.01	0.01	×	3.12% × (1 – 21.00%)	=	0.02%
Total:	55,050)					1.00					14.06%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	44,227)	44,227)	÷	57,121)	=	0.77	0.77	×	17.28%	=	13.38%
Long-term debt and finance lease liabilities³	12,441)	12,441)	÷	57,121)	=	0.22	0.22	×	2.50% × (1 – 21.00%)	=	0.43%
Operating lease liability⁴	453)	453)	÷	57,121)	=	0.01	0.01	×	3.36% × (1 – 21.00%)	=	0.02%
Total:	57,121)					1.00					13.83%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	36,852)	36,852)	÷	50,247)	=	0.73	0.73	×	17.28%	=	12.67%
Long-term debt and finance lease liabilities³	12,868)	12,868)	÷	50,247)	=	0.26	0.26	×	2.79% × (1 – 21.00%)	=	0.56%
Operating lease liability⁴	527)	527)	÷	50,247)	=	0.01	0.01	×	3.78% × (1 – 21.00%)	=	0.03%
Total:	50,247)					1.00					13.27%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	31,817)	31,817)	÷	44,291)	=	0.72	0.72	×	17.28%	=	12.41%
Long-term debt and finance lease liabilities³	11,925)	11,925)	÷	44,291)	=	0.27	0.27	×	3.28% × (1 – 21.00%)	=	0.70%
Operating lease liability⁴	549)	549)	÷	44,291)	=	0.01	0.01	×	4.22% × (1 – 21.00%)	=	0.04%
Total:	44,291)					1.00					13.15%

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

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Dec 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	27,958)	27,958)	÷	39,421)	=	0.71	0.71	×	17.28%	=	12.25%
Long-term debt and finance lease liabilities³	10,850)	10,850)	÷	39,421)	=	0.28	0.28	×	3.75% × (1 – 21.00%)	=	0.82%
Operating lease liability⁴	613)	613)	÷	39,421)	=	0.02	0.02	×	3.75% × (1 – 21.00%)	=	0.05%
Total:	39,421)					1.00					13.12%

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

¹ US$ in millions

² Equity. See details »

³ Long-term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

IQVIA Holdings Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	(1,814)	(1,260)	(2,083)	(2,222)	(2,239)
Invested capital²	21,926)	21,241)	21,108)	20,313)	20,458)
Performance Ratio
Economic spread ratio³	-8.27%	-5.93%	-9.87%	-10.94%	-10.95%
Benchmarks
Economic Spread Ratio, Competitors⁴
AbbVie Inc.	5.40%	4.79%	-3.06%	7.21%	—
Amgen Inc.	7.40%	7.38%	11.70%	13.90%	—
Bristol-Myers Squibb Co.	-0.69%	1.56%	-14.01%	-3.68%	—
Danaher Corp.	-2.81%	-2.15%	-3.55%	-6.95%	—
Eli Lilly & Co.	10.59%	12.29%	18.95%	15.78%	—
Gilead Sciences Inc.	2.48%	9.01%	-4.05%	7.26%	—
Johnson & Johnson	5.21%	10.28%	5.05%	3.96%	—
Merck & Co. Inc.	11.68%	11.82%	4.66%	11.24%	—
Moderna Inc.	29.66%	117.98%	53.82%	-145.82%	—
Pfizer Inc.	18.62%	11.77%	-2.94%	5.67%	—
Regeneron Pharmaceuticals Inc.	24.30%	67.30%	39.17%	28.42%	—
Thermo Fisher Scientific Inc.	-2.88%	-1.05%	-0.05%	-3.94%	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,814 ÷ 21,926 = -8.27%

⁴ Click competitor name to see calculations.

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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.	IQVIA Holdings Inc. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

IQVIA Holdings Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	(1,814)	(1,260)	(2,083)	(2,222)	(2,239)

Revenues	14,410)	13,874)	11,359)	11,088)	10,412)
Add: Increase (decrease) in unearned income	(28)	573)	238)	7)	22)
Adjusted revenues	14,382)	14,447)	11,597)	11,095)	10,434)
Performance Ratio
Economic profit margin²	-12.62%	-8.72%	-17.96%	-20.03%	-21.46%
Benchmarks
Economic Profit Margin, Competitors³
AbbVie Inc.	7.64%	8.17%	-6.93%	13.61%	—
Amgen Inc.	11.84%	12.22%	18.72%	23.41%	—
Bristol-Myers Squibb Co.	-1.07%	2.71%	-29.70%	-14.12%	—
Danaher Corp.	-6.98%	-5.38%	-10.40%	-22.52%	—
Eli Lilly & Co.	9.02%	11.34%	18.96%	15.20%	—
Gilead Sciences Inc.	4.19%	15.94%	-8.36%	10.32%	—
Johnson & Johnson	6.25%	10.76%	6.02%	4.68%	—
Merck & Co. Inc.	14.57%	17.16%	5.55%	12.88%	—
Moderna Inc.	14.81%	61.54%	55.71%	—	—
Pfizer Inc.	20.55%	12.70%	-7.28%	13.27%	—
Regeneron Pharmaceuticals Inc.	24.46%	45.51%	38.16%	23.59%	—
Thermo Fisher Scientific Inc.	-5.32%	-2.15%	-0.10%	-8.12%	—

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -1,814 ÷ 14,382 = -12.62%

³ Click competitor name to see calculations.

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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.	IQVIA Holdings Inc. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

IQVIA Holdings Inc. (NYSE:IQV)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin