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.
Paying user area
Try for free
Lowe’s Cos. Inc. pages available for free this week:
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Lowe’s Cos. Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Lowe’s Cos. Inc., economic profit calculation
US$ in millions
| 12 months ended: | Jan 31, 2025 | Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
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
= – × =
The financial data reveals several notable trends in operational performance, capital efficiency, and profitability over the observed six-year period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a generally upward trend from 2020 through 2022, increasing from $5,097 million in 2020 to a peak of $9,827 million in 2022. However, this was followed by a significant decline to $7,020 million in 2023. Subsequent years showed a recovery with NOPAT rising again to $8,789 million in 2024 before slightly decreasing to $8,137 million in 2025. Overall, despite the mid-period volatility, NOPAT remains substantially higher at the end of the period compared to its start.
- Cost of Capital
- The cost of capital increased from 11.81% in 2020 to a peak of 13.96% in 2022 before receding modestly in the following years to 13.4% in 2025. This upward pressure on capital costs indicates a gradually more expensive funding environment, which could impact investment decisions and profitability margins.
- Invested Capital
- Invested capital showed a declining trend initially, moving from $26,717 million in 2020 to a low of $24,710 million in 2023. This decline could indicate capital divestment, optimization, or asset disposal. However, invested capital rebounded thereafter, reaching $26,276 million by 2025, nearing the initial level noted at the beginning of the period. This pattern suggests active management of capital allocation with an emphasis on returning to previous investment levels.
- Economic Profit
- Economic profit demonstrated strong growth early in the period, growing from $1,941 million in 2020 to $6,156 million in 2022. This increase aligns with rising NOPAT and suggests improved value creation in the initial years. Despite a moderation in 2023 to $3,779 million, economic profit surged again in 2024 to $5,276 million, before declining slightly to $4,616 million in 2025. The fluctuations in economic profit correspond with changes in NOPAT and invested capital but remain significantly positive, indicating sustained economic value generation.
In summary, the company has experienced substantial growth in profitability and economic profit during the early years, followed by a period of volatility marked by declines and recoveries. The cost of capital has generally trended upward, potentially exerting pressure on returns. Invested capital was managed dynamically, with reductions followed by a return to prior levels. These patterns reflect adaptive financial management amid changing operational and economic conditions.
Net Operating Profit after Taxes (NOPAT)
Lowe’s Cos. Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in deferred revenue.
3 Addition of increase (decrease) in equity equivalents to net earnings.
4 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2025 Calculation
Tax benefit of interest expense, net of amount capitalized = Adjusted interest expense, net of amount capitalized × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net earnings.
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
- Net Earnings
- The net earnings of the company demonstrated a significant upward trend from 2020 to 2022, rising from 4,281 million US dollars to 8,442 million US dollars. This almost doubled the net earnings within a two-year period, indicating robust profitability. However, in 2023, there was a noticeable decline to 6,437 million US dollars, followed by a partial recovery in 2024 to 7,726 million US dollars. The most recent data for 2025 shows a decrease again to 6,957 million US dollars, suggesting some volatility or challenges impacting net earnings in the latter period.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT figures align with the general trend observed in net earnings. Starting at 5,097 million US dollars in 2020, NOPAT increased steadily through 2021 and peaked at 9,827 million US dollars in 2022. This indicates improved operational efficiency and profitability. Following the peak, NOPAT decreased to 7,020 million US dollars in 2023, then rose again to 8,789 million US dollars in 2024, before declining to 8,137 million US dollars in 2025. Although the fluctuations in NOPAT mirror those in net earnings, the values still reflect a relatively strong operating performance over the years.
Cash Operating Taxes
Lowe’s Cos. Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
The data reflects the annual figures for income tax provision and cash operating taxes over a six-year period. Both financial items show a general upward trend from 2020 to 2023, followed by a noticeable decline in the later years.
- Income Tax Provision
- The income tax provision increased significantly from 1,342 million USD in 2020 to a peak of 2,766 million USD in 2022. After 2022, the provision declined steadily to 2,196 million USD by 2025. This pattern suggests a rise in taxable income or tax liabilities initially, followed by effective tax management or reduced taxable income in the later years.
- Cash Operating Taxes
- Cash operating taxes also exhibit consistent growth, increasing from 1,386 million USD in 2020 to a peak of 3,055 million USD in 2023. Post-2023, these taxes decreased to 2,501 million USD by 2025. This trend aligns closely with the income tax provision pattern, indicating cash tax payments followed similar dynamics, perhaps influenced by timing differences or changes in tax regulations.
Overall, the data shows strong growth in tax-related expenses through early years, peaking around 2022-2023, with subsequent reductions suggesting strategic tax planning, fluctuations in earnings, or changes in tax rules that impacted both provision and cash taxes similarly.
Invested Capital
Lowe’s Cos. Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of deferred revenue.
4 Addition of equity equivalents to shareholders’ equity (deficit).
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
7 Subtraction of investments.
The financial data reveals several notable trends over the periods analyzed. One prominent pattern is the consistent increase in total reported debt and leases from 23,750 million US dollars in early 2020 to a peak of 40,145 million US dollars in early 2024, followed by a slight reduction to 39,678 million US dollars in early 2025. This indicates a significant rise in the company's leverage over the five-year period, particularly between 2021 and 2024.
Shareholders' equity shows a concerning downward trajectory, decreasing from 1,972 million US dollars in early 2020 to a negative value starting in 2022. The deficit deepens sharply from -4,816 million US dollars in early 2022 to a low point around -15,050 million US dollars in early 2024, with a minor improvement to -14,231 million US dollars in early 2025. This negative equity position suggests substantial accumulated losses or other equity-reducing events, which may impact the company’s financial stability and shareholder confidence.
Invested capital fluctuates throughout the period, starting at 26,717 million US dollars in early 2020 and peaking at 28,534 million US dollars in early 2021. Subsequently, it declines to a low of 24,710 million US dollars in early 2023 before gradually increasing again to 26,276 million US dollars by early 2025. These movements reflect variations in the company’s long-term investments and financing structure, possibly influenced by the changes in debt and equity.
- Total Reported Debt & Leases
- Shows a strong upward trend from 2020 through 2024, increasing by approximately 69%, followed by a slight decrease in 2025.
- Shareholders’ Equity (Deficit)
- Transitions from positive equity into a growing deficit starting in 2022, with the deficit nearly tripling by 2024 and remaining substantial in 2025.
- Invested Capital
- Peaks in 2021, declines through 2023, then recovers modestly by 2025, suggesting adjustments in capital investment and financing.
Overall, the company exhibits increasing financial leverage and deteriorating equity over the analyzed period, which may reflect operational challenges, increased borrowing, or sustained losses. The minor recovery in invested capital in the later periods could indicate attempts to stabilize or improve financial structure. Close attention to the relationship between debt levels and equity is warranted to assess ongoing financial health and risk exposure.
Cost of Capital
Lowe’s Cos. Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-02-02).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-02-03).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-01-28).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-01-29).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt, including finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-01-31).
1 US$ in millions
2 Equity. See details »
3 Debt, including finance lease obligations. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Lowe’s Cos. Inc., economic spread ratio calculation, comparison to benchmarks
| Jan 31, 2025 | Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| TJX Cos. Inc. | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial data reveals several notable trends over the analyzed periods. Economic profit displays an overall upward trend from 2020 to 2025, with fluctuations observable across the years. It begins at 1,941 million US dollars in 2020, peaks significantly at 6,156 million in 2022, dips to 3,779 million in 2023, then rises again to 5,276 million in 2024 before slightly decreasing to 4,616 million in 2025. This pattern indicates periods of increased profitability followed by moderate declines, suggesting variability in operating performance or external factors impacting economic profit.
Invested capital demonstrates a different pattern characterized by initial growth followed by a general decline and then stabilization. Starting at 26,717 million US dollars in 2020, it reaches a high of 28,534 million in 2021, thereafter decreasing to 24,710 million in 2023. Subsequently, there is a modest recovery to 26,276 million by 2025. This fluctuation points to shifts in capital allocation or asset base adjustments, reflecting possible changes in investment strategy or asset management efficiency.
The economic spread ratio, which represents the relationship between economic profit and invested capital, exhibits notable volatility with an upward trend. It rises from 7.26% in 2020 to a peak of 23.41% in 2022, indicating a significant improvement in return on invested capital during that year. Following this peak, the ratio decreases to 15.29% in 2023 but rebounds to 20.36% in 2024 before a slight decline to 17.57% in 2025. This variation aligns with the observed economic profit trends and suggests fluctuations in operational efficiency or market conditions impacting profitability relative to capital deployed.
- Economic Profit
- Shows an overall increase with notable peaks in 2022 and 2024, suggesting periods of enhanced profitability amid some volatility.
- Invested Capital
- Increases in early periods followed by a decrease and stabilization, indicating adjustments in capital deployment or asset base over time.
- Economic Spread Ratio
- Experiences significant fluctuations with a marked peak in 2022, reflecting changes in returns generated from invested capital and operational efficiency.
Economic Profit Margin
Lowe’s Cos. Inc., economic profit margin calculation, comparison to benchmarks
| Jan 31, 2025 | Feb 2, 2024 | Feb 3, 2023 | Jan 28, 2022 | Jan 29, 2021 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net sales | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| TJX Cos. Inc. | |||||||
Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
The data reveals several notable trends in the financial performance over the analyzed periods.
- Economic Profit
- There is an overall upward trajectory in economic profit from 2020 to 2025, with the figure increasing from 1,941 million US dollars in 2020 to 4,616 million US dollars by 2025. Economic profit saw a marked peak in 2022 at 6,156 million, followed by a decline in 2023 but rising again in 2024 before decreasing once more in 2025. This pattern suggests some volatility despite general growth over the longer term.
- Adjusted Net Sales
- Net sales exhibited a strong growth trend up to 2023, increasing from 72,135 million US dollars in 2020 to a peak of 96,822 million US dollars in 2023. However, from 2023 onwards, there was a noticeable decline in net sales, falling to 86,206 million in 2024 and further to 83,667 million in 2025. This reversal points to challenges in sustaining top-line growth in the later period.
- Economic Profit Margin
- The economic profit margin also shows significant fluctuations. It rose from 2.69% in 2020 to a high of 6.37% in 2022, reflecting improved profitability relative to sales during this interval. Following 2022, the margin decreased in 2023 to 3.9% but rebounded sharply in 2024 to 6.12% before declining again to 5.52% in 2025. This pattern suggests that profitability efficiency experienced periods of both expansion and contraction.
In summary, the financial data indicates that while there was substantial growth in both economic profit and net sales during the early part of the period, especially through 2022, the subsequent years show signs of volatility and a downward adjustment in sales figures. Economic profitability margins followed a similar pattern of fluctuation, suggesting operational challenges or changing market conditions impacting the company's ability to consistently convert sales growth into economic profit.