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.
Economic Profit
Medtronic PLC, economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24).
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
= 4,980 – 10.76% × 70,365 = -2,593
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibits fluctuations over the analyzed periods. It decreased from 4,408 million USD in 2020 to 4,049 million USD in 2021, then increased to 4,888 million USD in 2022. Following this peak, NOPAT declined again to 4,151 million USD in 2023 and further to 3,736 million USD in 2024, before rising notably to 4,980 million USD in 2025. The pattern indicates a somewhat volatile profitability with a general downward trend between 2020 and 2024, succeeded by a substantial recovery in 2025.
- Cost of Capital
- The cost of capital remained relatively stable throughout the years, fluctuating modestly between 10.76% and 11.19%. It peaked at 11.19% in 2021, then slightly decreased to 11% in 2022, with minor variations thereafter, ending at 10.76% in 2025. The consistency in the cost of capital suggests stable financing conditions for the company during the period analyzed.
- Invested Capital
- Invested capital showed some variability but remained within a narrow range. Starting at 71,146 million USD in 2020, it slightly increased to 72,405 million USD in 2021, then decreased to 69,629 million USD in 2022. It rose again to 70,505 million USD in 2023, dropped to 68,670 million USD in 2024, and finally increased to 70,365 million USD in 2025. Overall, the invested capital maintained a relatively stable base without significant upward or downward trends.
- Economic Profit
- The economic profit was negative throughout all periods, indicating that the company did not generate returns above its cost of capital. The loss was most pronounced in 2021 at -4,055 million USD, improved slightly in 2022 to -2,770 million USD, but deteriorated again in 2023 and 2024 to -3,680 million USD and -3,751 million USD respectively. The most recent figure in 2025 shows an improvement to -2,593 million USD, suggesting some progress in value creation, though economic profit remains negative.
Net Operating Profit after Taxes (NOPAT)
Medtronic PLC, NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowances and credit losses.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in restructuring reserve.
5 Addition of increase (decrease) in equity equivalents to net income attributable to Medtronic.
6 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,110 × 4.00% = 44
7 2025 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 773 × 21.00% = 162
8 Addition of after taxes interest expense to net income attributable to Medtronic.
9 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 6 × 21.00% = 1
10 Elimination of after taxes investment income.
- Net Income Attributable to Medtronic
- The net income figures demonstrated variability over the reported periods. Starting at 4,789 million US dollars in April 2020, the net income decreased significantly to 3,606 million by April 2021. It rebounded to 5,039 million in April 2022, indicating a strong recovery. However, a subsequent decline occurred, with net income falling to 3,758 million in April 2023 and slightly decreasing again to 3,676 million in April 2024. The latest period, April 2025, shows an improvement to 4,662 million, suggesting a positive turnaround in profitability.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT followed a somewhat similar pattern to net income, but with slightly less fluctuation. It decreased from 4,408 million in April 2020 to 4,049 million in April 2021. Then, it increased again to 4,888 million by April 2022. Thereafter, it declined to 4,151 million in April 2023 and further down to 3,736 million in April 2024. The most recent figure in April 2025 reached 4,980 million, representing the highest value among the periods analyzed and indicating improved operational profitability.
- Overall Trend Analysis
- Both net income and NOPAT exhibited cyclical patterns with notable decreases in 2021 and 2023-2024, followed by recoveries in 2022 and 2025. The volatility suggests the company faced varying operational and market challenges throughout the periods. The recent rise in both metrics in 2025 points towards an enhanced financial performance and operational efficiency. Furthermore, the highest NOPAT value in the final period underscores an improvement in profitability after taxes on operating income, which is a positive indicator for core business performance.
Cash Operating Taxes
Medtronic PLC, cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24).
The financial data reveals notable trends in the tax-related expenses over the observed period.
- Income Tax Provision (Benefit)
- The income tax provision shows significant fluctuations from 2020 to 2025. Initially, in 2020, there was a tax benefit of -$751 million, indicating a negative tax provision. However, from 2021 onwards, there is a reversal to positive tax provisions, increasing from $265 million in 2021 to a peak of $1,580 million in 2023. Thereafter, the provision decreases to $1,133 million in 2024 and further to $936 million in 2025. This pattern suggests an initial tax advantage followed by growing tax liabilities that begin to moderate in the final years of the period.
- Cash Operating Taxes
- Cash operating taxes demonstrate a consistent upward trend throughout the period from 2020 to 2023, increasing from $761 million to $1,979 million. In 2024, there is a slight decline to $1,820 million, followed by a further decrease to $1,436 million in 2025. This rise and subsequent decline in cash taxes could reflect operational performance fluctuations or changes in tax strategies and cash management.
Overall, the data indicates evolving tax expenses with an initial tax benefit turning into substantial tax provisions and an increasing trend in cash operating taxes until 2023, followed by a moderate decline in the last two reporting periods.
Invested Capital
Medtronic PLC, invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24).
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 deferred revenue.
5 Addition of restructuring reserve.
6 Addition of equity equivalents to shareholders’ equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of construction in progress.
9 Subtraction of available-for-sale debt securities.
The financial data shows several notable trends over the six-year period under review.
- Total reported debt & leases
- The total reported debt and leases have generally increased, growing from 25,742 million US dollars in April 2020 to 29,626 million US dollars in April 2025. Despite some fluctuations, such as a decrease in 2022, the overall trend is upward, indicating a gradual rise in leverage or financing through debt and leases.
- Shareholders’ equity
- Shareholders’ equity experienced a slight increase from 50,737 million US dollars in April 2020 to a peak of 52,551 million US dollars in April 2022. However, from that peak, equity declined steadily to 48,024 million US dollars by April 2025. This downward trajectory in equity may reflect distributions to shareholders, asset impairments, or other factors reducing net asset value.
- Invested capital
- Invested capital saw a modest increase from 71,146 million US dollars in April 2020 to a peak near 72,405 million US dollars in April 2021. Subsequently, it declined to a low of 68,670 million US dollars in April 2024 before rising again to 70,365 million US dollars in April 2025. This pattern suggests some variability in the company's capital investment or asset base, with a general trend of moderate fluctuation rather than sustained growth or contraction.
Cost of Capital
Medtronic PLC, cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 110,624) | 110,624) | ÷ | 138,005) | = | 0.80 | 0.80 | × | 12.90% | = | 10.34% | ||
| Debt3 | 26,271) | 26,271) | ÷ | 138,005) | = | 0.19 | 0.19 | × | 2.66% × (1 – 21.00%) | = | 0.40% | ||
| Operating lease liability4 | 1,110) | 1,110) | ÷ | 138,005) | = | 0.01 | 0.01 | × | 4.00% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 138,005) | 1.00 | 10.76% | ||||||||||
Based on: 10-K (reporting date: 2025-04-25).
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 | 102,800) | 102,800) | ÷ | 126,170) | = | 0.81 | 0.81 | × | 12.90% | = | 10.51% | ||
| Debt3 | 22,347) | 22,347) | ÷ | 126,170) | = | 0.18 | 0.18 | × | 2.67% × (1 – 21.00%) | = | 0.37% | ||
| Operating lease liability4 | 1,023) | 1,023) | ÷ | 126,170) | = | 0.01 | 0.01 | × | 3.40% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 126,170) | 1.00 | 10.90% | ||||||||||
Based on: 10-K (reporting date: 2024-04-26).
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 | 116,291) | 116,291) | ÷ | 139,117) | = | 0.84 | 0.84 | × | 12.90% | = | 10.78% | ||
| Debt3 | 21,777) | 21,777) | ÷ | 139,117) | = | 0.16 | 0.16 | × | 2.53% × (1 – 21.00%) | = | 0.31% | ||
| Operating lease liability4 | 1,049) | 1,049) | ÷ | 139,117) | = | 0.01 | 0.01 | × | 2.40% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 139,117) | 1.00 | 11.11% | ||||||||||
Based on: 10-K (reporting date: 2023-04-28).
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 | 117,817) | 117,817) | ÷ | 141,661) | = | 0.83 | 0.83 | × | 12.90% | = | 10.73% | ||
| Debt3 | 22,974) | 22,974) | ÷ | 141,661) | = | 0.16 | 0.16 | × | 2.05% × (1 – 21.00%) | = | 0.26% | ||
| Operating lease liability4 | 870) | 870) | ÷ | 141,661) | = | 0.01 | 0.01 | × | 2.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 141,661) | 1.00 | 11.00% | ||||||||||
Based on: 10-K (reporting date: 2022-04-29).
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 | 167,894) | 167,894) | ÷ | 197,582) | = | 0.85 | 0.85 | × | 12.90% | = | 10.96% | ||
| Debt3 | 28,673) | 28,673) | ÷ | 197,582) | = | 0.15 | 0.15 | × | 1.96% × (1 – 21.00%) | = | 0.22% | ||
| Operating lease liability4 | 1,015) | 1,015) | ÷ | 197,582) | = | 0.01 | 0.01 | × | 2.30% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 197,582) | 1.00 | 11.19% | ||||||||||
Based on: 10-K (reporting date: 2021-04-30).
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 | 125,961) | 125,961) | ÷ | 154,436) | = | 0.82 | 0.82 | × | 12.90% | = | 10.52% | ||
| Debt3 | 27,530) | 27,530) | ÷ | 154,436) | = | 0.18 | 0.18 | × | 2.37% × (1 – 21.00%) | = | 0.33% | ||
| Operating lease liability4 | 945) | 945) | ÷ | 154,436) | = | 0.01 | 0.01 | × | 3.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 154,436) | 1.00 | 10.87% | ||||||||||
Based on: 10-K (reporting date: 2020-04-24).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Medtronic PLC, economic spread ratio calculation, comparison to benchmarks
| Apr 25, 2025 | Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (2,593) | (3,751) | (3,680) | (2,770) | (4,055) | (3,324) | |
| Invested capital2 | 70,365) | 68,670) | 70,505) | 69,629) | 72,405) | 71,146) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -3.69% | -5.46% | -5.22% | -3.98% | -5.60% | -4.67% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Abbott Laboratories | — | -2.27% | -2.58% | -0.36% | 0.09% | -3.17% | |
| Elevance Health Inc. | — | -1.83% | -2.30% | -1.27% | 0.10% | -2.22% | |
| Intuitive Surgical Inc. | — | 10.06% | 3.62% | 3.33% | 18.94% | 6.93% | |
| UnitedHealth Group Inc. | — | -0.31% | 4.58% | 3.61% | 3.46% | 4.09% | |
Based on: 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -2,593 ÷ 70,365 = -3.69%
4 Click competitor name to see calculations.
The financial data over the examined periods reveals several important trends related to economic profit, invested capital, and economic spread ratio.
- Economic Profit
- Economic profit has consistently been negative across all periods, indicating the company has not generated returns in excess of its cost of capital. The losses deepened from -3324 million USD in April 2020 to a peak negative value of -4055 million USD in April 2021. Subsequently, there was a reduction in the magnitude of losses, with economic profit improving to -2593 million USD by April 2025. This pattern suggests a partial recovery or improved efficiency in generating economic value over the later years.
- Invested Capital
- Invested capital maintains a relatively stable range, fluctuating mildly between approximately 68670 and 72405 million USD throughout the period. The highest value was observed in April 2021 at 72405 million USD, followed by a slight decline to the lowest point of 68670 million USD in April 2024, and a minor increase thereafter. This stability indicates relatively consistent investment levels with minor adjustments year to year.
- Economic Spread Ratio
- The economic spread ratio remains negative for all periods, reflecting returns below the cost of capital. It worsened from -4.67% in April 2020 to a more adverse figure of -5.6% in April 2021, aligning with the peak economic profit loss that year. Afterwards, it shows improvement trends with fluctuations, reaching its best (least negative) value of -3.69% in April 2025. These movements mirror the partial recovery indicated in economic profit, suggesting an improving but still challenging return environment.
In summary, the data exhibits a pattern of initial economic underperformance with gradual signs of stabilization and modest recovery towards the later years. Invested capital remained largely stable, underpinning the observed shifts in economic profit and spread, which indicate improving but still negative economic returns over the analyzed timeframe.
Economic Profit Margin
Medtronic PLC, economic profit margin calculation, comparison to benchmarks
| Apr 25, 2025 | Apr 26, 2024 | Apr 28, 2023 | Apr 29, 2022 | Apr 30, 2021 | Apr 24, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (2,593) | (3,751) | (3,680) | (2,770) | (4,055) | (3,324) | |
| Net sales | 33,537) | 32,364) | 31,227) | 31,686) | 30,117) | 28,913) | |
| Add: Increase (decrease) in deferred revenue | (7) | 48) | 6) | 31) | 65) | (12) | |
| Adjusted net sales | 33,530) | 32,412) | 31,233) | 31,717) | 30,182) | 28,901) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -7.73% | -11.57% | -11.78% | -8.73% | -13.43% | -11.50% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Abbott Laboratories | — | -3.25% | -3.83% | -0.51% | 0.13% | -5.53% | |
| Elevance Health Inc. | — | -0.82% | -0.94% | -0.54% | 0.05% | -1.04% | |
| Intuitive Surgical Inc. | — | 9.36% | 3.61% | 2.88% | 14.91% | 7.11% | |
| UnitedHealth Group Inc. | — | -0.15% | 2.28% | 1.85% | 1.70% | 2.08% | |
Based on: 10-K (reporting date: 2025-04-25), 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -2,593 ÷ 33,530 = -7.73%
3 Click competitor name to see calculations.
- Adjusted Net Sales
- The adjusted net sales show a generally increasing trend over the six-year period. Starting at 28,901 million US dollars in April 2020, sales rose steadily to reach 33,530 million US dollars by April 2025. There was consistent growth each year, with a slight decrease in growth rate observed in the year ending April 2023, but the upward trajectory resumed thereafter.
- Economic Profit
- Economic profit remains negative throughout the observed period, indicating that the company is not generating profit above its cost of capital. The loss was most pronounced in April 2021 with a deficit of 4,055 million US dollars. Subsequently, economic profit showed some improvement, reducing the loss to 2,593 million US dollars by April 2025. Despite this improvement, the company continues to post a significant economic loss.
- Economic Profit Margin
- The economic profit margin follows a pattern similar to economic profit, remaining negative in all periods. It reached its lowest point in April 2021 at -13.43%. Afterward, the margin improved, decreasing the negative figure to -7.73% by April 2025, suggesting an enhanced but still insufficient return compared to economic costs. This improvement in margin aligns with the reduction in economic loss over the same timeframe.
- Overall Analysis
- The data indicates that while sales are growing steadily, the company struggles to convert this growth into positive economic profit. The persistent negative economic profit and margin suggest that the cost of capital remains a challenge. However, the trend towards decreasing economic losses and a less negative profit margin in recent years could signal improving operational efficiency or better capital utilization. Continued focus on managing costs and enhancing profitability will be critical for future financial health.