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

Johnson & Johnson, economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 29, 2019
Net operating profit after taxes (NOPAT)¹	8,905)	16,089)	18,854)	13,700)	12,552)
Cost of capital²	8.99%	8.90%	8.91%	8.85%	8.98%
Invested capital³	99,118)	113,927)	98,203)	98,488)	96,969)

Economic profit⁴	(7)	5,944)	10,099)	4,982)	3,845)

Based on: 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), 10-K (reporting date: 2019-12-29).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 8,905 – 8.99% × 99,118 = -7

Download chart

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.	Johnson & Johnson economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Johnson & Johnson, NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 29, 2019
Net earnings	35,153)	17,941)	20,878)	14,714)	15,119)
Deferred income tax expense (benefit)¹	(4,059)	(1,663)	(2,079)	(1,141)	(2,476)
Increase (decrease) in allowances for doubtful accounts²	(3)	(27)	(63)	67)	(22)
Increase (decrease) in restructuring reserve³	—)	(28)	(7)	(36)	(62)
Increase (decrease) in equity equivalents⁴	(4,062)	(1,718)	(2,149)	(1,110)	(2,560)
Interest expense, net of portion capitalized	772)	276)	183)	201)	318)
Interest expense, operating lease liability⁵	35)	44)	28)	31)	30)
Adjusted interest expense, net of portion capitalized	807)	320)	211)	232)	348)
Tax benefit of interest expense, net of portion capitalized⁶	(169)	(67)	(44)	(49)	(73)
Adjusted interest expense, net of portion capitalized, after taxes⁷	637)	253)	166)	184)	275)
Interest income	(1,261)	(490)	(53)	(111)	(357)
Investment income, before taxes	(1,261)	(490)	(53)	(111)	(357)
Tax expense (benefit) of investment income⁸	265)	103)	11)	23)	75)
Investment income, after taxes⁹	(996)	(387)	(42)	(88)	(282)
(Income) loss from discontinued operations, net of tax¹⁰	(21,827)	—)	—)	—)	—)
Net operating profit after taxes (NOPAT)	8,905)	16,089)	18,854)	13,700)	12,552)

Based on: 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), 10-K (reporting date: 2019-12-29).

¹ Elimination of deferred tax expense. See details »

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

³ Addition of increase (decrease) in restructuring reserve.

⁴ Addition of increase (decrease) in equity equivalents to net earnings.

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,100 × 3.14% = 35

⁶ 2023 Calculation
Tax benefit of interest expense, net of portion capitalized = Adjusted interest expense, net of portion capitalized × Statutory income tax rate
= 807 × 21.00% = 169

⁷ Addition of after taxes interest expense to net earnings.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 1,261 × 21.00% = 265

⁹ Elimination of after taxes investment income.

¹⁰ Elimination of discontinued operations.

Download chart

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.	Johnson & Johnson NOPAT decreased from 2021 to 2022 and from 2022 to 2023.

Johnson & Johnson, cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 29, 2019
Provision for taxes on income	1,736)	3,784)	1,898)	1,783)	2,209)
Less: Deferred income tax expense (benefit)	(4,059)	(1,663)	(2,079)	(1,141)	(2,476)
Add: Tax savings from interest expense, net of portion capitalized	169)	67)	44)	49)	73)
Less: Tax imposed on investment income	265)	103)	11)	23)	75)
Cash operating taxes	5,700)	5,411)	4,010)	2,949)	4,683)

Based on: 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), 10-K (reporting date: 2019-12-29).

Download chart

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.	Johnson & Johnson cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Johnson & Johnson, invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 29, 2019
Loans and notes payable	3,451)	12,771)	3,766)	2,631)	1,202)
Long-term debt, excluding current portion	25,881)	26,888)	29,985)	32,635)	26,494)
Operating lease liability¹	1,100)	1,300)	1,000)	1,100)	985)
Total reported debt & leases	30,432)	40,959)	34,751)	36,366)	28,681)
Shareholders’ equity	68,774)	76,804)	74,023)	63,278)	59,471)
Net deferred tax (assets) liabilities²	(6,086)	(2,749)	(2,736)	(1,319)	(1,861)
Allowances for doubtful accounts³	166)	203)	230)	293)	226)
Restructuring reserve⁴	—)	109)	137)	144)	180)
Equity equivalents⁵	(5,920)	(2,437)	(2,369)	(882)	(1,455)
Accumulated other comprehensive (income) loss, net of tax⁶	12,527)	12,967)	13,058)	15,242)	15,891)
Adjusted shareholders’ equity	75,381)	87,334)	84,712)	77,638)	73,907)
Construction in progress⁷	(5,627)	(4,974)	(4,139)	(4,316)	(3,637)
Current marketable securities⁸	(1,068)	(9,392)	(17,121)	(11,200)	(1,982)
Invested capital	99,118)	113,927)	98,203)	98,488)	96,969)

Based on: 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), 10-K (reporting date: 2019-12-29).

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 restructuring reserve.

⁵ Addition of equity equivalents to shareholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of construction in progress.

⁸ Subtraction of current marketable securities.

Download chart

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Johnson & Johnson invested capital increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Johnson & Johnson, cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	377,093)	377,093)	÷	406,525)	=	0.93	0.93	×	9.50%	=	8.81%
Borrowings³	28,332)	28,332)	÷	406,525)	=	0.07	0.07	×	3.14% × (1 – 21.00%)	=	0.17%
Operating lease liability⁴	1,100)	1,100)	÷	406,525)	=	0.00	0.00	×	3.14% × (1 – 21.00%)	=	0.01%
Total:	406,525)					1.00					8.99%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	412,102)	412,102)	÷	451,461)	=	0.91	0.91	×	9.50%	=	8.67%
Borrowings³	38,059)	38,059)	÷	451,461)	=	0.08	0.08	×	3.38% × (1 – 21.00%)	=	0.23%
Operating lease liability⁴	1,300)	1,300)	÷	451,461)	=	0.00	0.00	×	3.38% × (1 – 21.00%)	=	0.01%
Total:	451,461)					1.00					8.90%

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

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	436,958)	436,958)	÷	474,909)	=	0.92	0.92	×	9.50%	=	8.74%
Borrowings³	36,951)	36,951)	÷	474,909)	=	0.08	0.08	×	2.76% × (1 – 21.00%)	=	0.17%
Operating lease liability⁴	1,000)	1,000)	÷	474,909)	=	0.00	0.00	×	2.76% × (1 – 21.00%)	=	0.00%
Total:	474,909)					1.00					8.91%

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

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	425,504)	425,504)	÷	467,270)	=	0.91	0.91	×	9.50%	=	8.65%
Borrowings³	40,666)	40,666)	÷	467,270)	=	0.09	0.09	×	2.85% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	1,100)	1,100)	÷	467,270)	=	0.00	0.00	×	2.85% × (1 – 21.00%)	=	0.01%
Total:	467,270)					1.00					8.85%

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

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Dec 29, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	392,942)	392,942)	÷	424,623)	=	0.93	0.93	×	9.50%	=	8.79%
Borrowings³	30,696)	30,696)	÷	424,623)	=	0.07	0.07	×	3.19% × (1 – 21.00%)	=	0.18%
Operating lease liability⁴	985)	985)	÷	424,623)	=	0.00	0.00	×	3.00% × (1 – 21.00%)	=	0.01%
Total:	424,623)					1.00					8.98%

Based on: 10-K (reporting date: 2019-12-29).

¹ US$ in millions

² Equity. See details »

³ Borrowings. See details »

⁴ Operating lease liability. See details »

Johnson & Johnson, economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 29, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(7)	5,944)	10,099)	4,982)	3,845)
Invested capital²	99,118)	113,927)	98,203)	98,488)	96,969)
Performance Ratio
Economic spread ratio³	-0.01%	5.22%	10.28%	5.06%	3.97%
Benchmarks
Economic Spread Ratio, Competitors⁴
AbbVie Inc.	-4.02%	5.41%	4.79%	-3.05%	7.22%
Amgen Inc.	2.73%	7.40%	7.38%	11.71%	13.91%
Bristol-Myers Squibb Co.	2.02%	-0.68%	1.57%	-14.00%	-3.67%
Danaher Corp.	-7.76%	-2.81%	-2.15%	-3.54%	-6.94%
Eli Lilly & Co.	3.28%	10.61%	12.30%	18.96%	15.79%
Gilead Sciences Inc.	6.00%	2.49%	9.02%	-4.04%	7.27%
Merck & Co. Inc.	-8.49%	11.70%	11.83%	4.67%	11.25%
Moderna Inc.	-122.48%	29.65%	117.96%	53.81%	-145.84%
Pfizer Inc.	-8.95%	18.62%	11.78%	-2.93%	5.68%
Regeneron Pharmaceuticals Inc.	21.20%	24.31%	67.31%	39.18%	28.44%
Thermo Fisher Scientific Inc.	-4.66%	-2.88%	-1.05%	-0.05%	-3.94%

Based on: 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), 10-K (reporting date: 2019-12-29).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -7 ÷ 99,118 = -0.01%

⁴ Click competitor name to see calculations.

Download chart

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.	Johnson & Johnson economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Johnson & Johnson, economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 29, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(7)	5,944)	10,099)	4,982)	3,845)
Sales to customers	85,159)	94,943)	93,775)	82,584)	82,059)
Performance Ratio
Economic profit margin²	-0.01%	6.26%	10.77%	6.03%	4.69%
Benchmarks
Economic Profit Margin, Competitors³
AbbVie Inc.	-5.04%	7.65%	8.18%	-6.92%	13.62%
Amgen Inc.	7.11%	11.85%	12.23%	18.72%	23.42%
Bristol-Myers Squibb Co.	3.03%	-1.06%	2.72%	-29.68%	-14.08%
Danaher Corp.	-25.47%	-6.97%	-5.37%	-10.39%	-22.52%
Eli Lilly & Co.	2.82%	9.03%	11.36%	18.98%	15.21%
Gilead Sciences Inc.	10.21%	4.21%	15.96%	-8.34%	10.34%
Merck & Co. Inc.	-9.88%	14.59%	17.18%	5.56%	12.89%
Moderna Inc.	-139.80%	14.80%	61.53%	55.69%	—
Pfizer Inc.	-23.69%	20.56%	12.70%	-7.26%	13.28%
Regeneron Pharmaceuticals Inc.	19.33%	24.48%	45.52%	38.18%	23.61%
Thermo Fisher Scientific Inc.	-9.30%	-5.31%	-2.14%	-0.10%	-8.11%

Based on: 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), 10-K (reporting date: 2019-12-29).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales to customers
= 100 × -7 ÷ 85,159 = -0.01%

³ Click competitor name to see calculations.

Download chart

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.	Johnson & Johnson economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.

Johnson & Johnson (NYSE:JNJ)

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