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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

Medtronic PLC, economic profit calculation

US$ in millions

12 months ended:	Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020	Apr 26, 2019
Net operating profit after taxes (NOPAT)¹	3,736)	4,151)	4,888)	4,049)	4,408)	5,457)
Cost of capital²	9.83%	10.01%	9.91%	10.08%	9.80%	10.02%
Invested capital³	68,670)	70,505)	69,629)	72,405)	71,146)	72,690)

Economic profit⁴	(3,017)	(2,907)	(2,010)	(3,247)	(2,562)	(1,829)

Based on: 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), 10-K (reporting date: 2019-04-26).

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
= 3,736 – 9.83% × 68,670 = -3,017

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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.	Medtronic PLC economic profit decreased from 2022 to 2023 and from 2023 to 2024.

Medtronic PLC, NOPAT calculation

US$ in millions

12 months ended:	Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020	Apr 26, 2019
Net income attributable to Medtronic	3,676)	3,758)	5,039)	3,606)	4,789)	4,631)
Deferred income tax expense (benefit)¹	(528)	(253)	(611)	(461)	(1,277)	(438)
Increase (decrease) in allowance for doubtful accounts²	(3)	(54)	(11)	33)	18)	(3)
Increase (decrease) in deferred revenue³	48)	6)	31)	65)	(12)	26)
Increase (decrease) in restructuring reserve⁴	(83)	120)	(36)	34)	(10)	19)
Increase (decrease) in equity equivalents⁵	(566)	(181)	(627)	(329)	(1,281)	(396)
Interest expense, net	719)	636)	553)	925)	1,092)	1,444)
Interest expense, operating lease liability⁶	35)	25)	17)	23)	28)	35)
Adjusted interest expense, net	754)	661)	570)	948)	1,120)	1,479)
Tax benefit of interest expense, net⁷	(158)	(139)	(120)	(199)	(235)	(311)
Adjusted interest expense, net, after taxes⁸	595)	522)	451)	749)	885)	1,169)
(Gain) loss on marketable securities	2)	33)	3)	(1)	(3)	44)
Investment income, before taxes	2)	33)	3)	(1)	(3)	44)
Tax expense (benefit) of investment income⁹	—)	(7)	(1)	—)	1)	(9)
Investment income, after taxes¹⁰	2)	26)	2)	(1)	(2)	35)
Net income (loss) attributable to noncontrolling interest	29)	26)	23)	24)	17)	19)
Net operating profit after taxes (NOPAT)	3,736)	4,151)	4,888)	4,049)	4,408)	5,457)

Based on: 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), 10-K (reporting date: 2019-04-26).

¹ Elimination of deferred tax expense. See details »

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

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 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,023 × 3.40% = 35

⁷ 2024 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 754 × 21.00% = 158

⁸ Addition of after taxes interest expense to net income attributable to Medtronic.

⁹ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -2 × 21.00% = 0

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.	Medtronic PLC NOPAT decreased from 2022 to 2023 and from 2023 to 2024.

Medtronic PLC, cash operating taxes calculation

US$ in millions

12 months ended:	Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020	Apr 26, 2019
Income tax provision (benefit)	1,133)	1,580)	455)	265)	(751)	547)
Less: Deferred income tax expense (benefit)	(528)	(253)	(611)	(461)	(1,277)	(438)
Add: Tax savings from interest expense, net	158)	139)	120)	199)	235)	311)
Less: Tax imposed on investment income	—)	(7)	(1)	—)	1)	(9)
Cash operating taxes	1,820)	1,979)	1,186)	925)	761)	1,305)

Based on: 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), 10-K (reporting date: 2019-04-26).

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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.	Medtronic PLC cash operating taxes increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

Medtronic PLC, invested capital calculation (financing approach)

US$ in millions

	Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020	Apr 26, 2019
Current debt obligations	1,092)	20)	3,742)	11)	2,776)	838)
Long-term debt	23,932)	24,344)	20,372)	26,378)	22,021)	24,486)
Operating lease liability¹	1,023)	1,049)	870)	1,015)	945)	553)
Total reported debt & leases	26,047)	25,413)	24,984)	27,404)	25,742)	25,877)
Shareholders’ equity	50,214)	51,483)	52,551)	51,428)	50,737)	50,091)
Net deferred tax (assets) liabilities²	(3,046)	(2,680)	(2,452)	(2,086)	(1,608)	(191)
Allowance for doubtful accounts³	173)	176)	230)	241)	208)	190)
Deferred revenue⁴	453)	405)	399)	368)	303)	315)
Restructuring reserve⁵	147)	230)	110)	146)	112)	186)
Equity equivalents⁶	(2,273)	(1,869)	(1,713)	(1,331)	(985)	500)
Accumulated other comprehensive (income) loss, net of tax⁷	3,318)	3,499)	2,265)	3,485)	3,560)	2,711)
Noncontrolling interests	206)	182)	171)	174)	135)	121)
Adjusted shareholders’ equity	51,465)	53,295)	53,274)	53,756)	53,447)	53,423)
Construction in progress⁸	(2,119)	(1,754)	(1,737)	(1,498)	(1,202)	(1,111)
Available-for-sale debt securities⁹	(6,723)	(6,449)	(6,892)	(7,257)	(6,841)	(5,499)
Invested capital	68,670)	70,505)	69,629)	72,405)	71,146)	72,690)

Based on: 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), 10-K (reporting date: 2019-04-26).

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.

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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.	Medtronic PLC invested capital increased from 2022 to 2023 but then decreased significantly from 2023 to 2024.

Medtronic PLC, cost of capital calculations

Apr 26, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	102,800)	102,800)	÷	126,170)	=	0.81	0.81	×	11.58%	=	9.44%
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					9.83%

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 »

Apr 28, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	116,291)	116,291)	÷	139,117)	=	0.84	0.84	×	11.58%	=	9.68%
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					10.01%

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 »

Apr 29, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	117,817)	117,817)	÷	141,661)	=	0.83	0.83	×	11.58%	=	9.63%
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					9.91%

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 »

Apr 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	167,894)	167,894)	÷	197,582)	=	0.85	0.85	×	11.58%	=	9.84%
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					10.08%

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 »

Apr 24, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	125,961)	125,961)	÷	154,436)	=	0.82	0.82	×	11.58%	=	9.45%
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					9.80%

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 »

Apr 26, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	133,284)	133,284)	÷	160,468)	=	0.83	0.83	×	11.58%	=	9.62%
Debt³	26,631)	26,631)	÷	160,468)	=	0.17	0.17	×	2.93% × (1 – 21.00%)	=	0.38%
Operating lease liability⁴	553)	553)	÷	160,468)	=	0.00	0.00	×	6.39% × (1 – 21.00%)	=	0.02%
Total:	160,468)					1.00					10.02%

Based on: 10-K (reporting date: 2019-04-26).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Medtronic PLC, economic spread ratio calculation, comparison to benchmarks

	Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020	Apr 26, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(3,017)	(2,907)	(2,010)	(3,247)	(2,562)	(1,829)
Invested capital²	68,670)	70,505)	69,629)	72,405)	71,146)	72,690)
Performance Ratio
Economic spread ratio³	-4.39%	-4.12%	-2.89%	-4.48%	-3.60%	-2.52%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	—	-2.00%	0.21%	0.66%	-2.61%	-3.93%
Cigna Group	—	-2.26%	0.77%	-0.21%	2.68%	-0.52%
CVS Health Corp.	—	0.44%	-4.00%	-0.03%	0.42%	-0.36%
Elevance Health Inc.	—	-1.03%	-0.20%	1.08%	-0.90%	-0.07%
Humana Inc.	—	1.13%	2.35%	2.69%	9.55%	7.69%
Intuitive Surgical Inc.	—	5.27%	4.99%	20.60%	8.59%	25.27%
UnitedHealth Group Inc.	—	5.67%	4.71%	4.57%	5.15%	5.17%

Based on: 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), 10-K (reporting date: 2019-04-26).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -3,017 ÷ 68,670 = -4.39%

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.	Medtronic PLC economic spread ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

Medtronic PLC, economic profit margin calculation, comparison to benchmarks

	Apr 26, 2024	Apr 28, 2023	Apr 29, 2022	Apr 30, 2021	Apr 24, 2020	Apr 26, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(3,017)	(2,907)	(2,010)	(3,247)	(2,562)	(1,829)

Net sales	32,364)	31,227)	31,686)	30,117)	28,913)	30,557)
Add: Increase (decrease) in deferred revenue	48)	6)	31)	65)	(12)	26)
Adjusted net sales	32,412)	31,233)	31,717)	30,182)	28,901)	30,583)
Performance Ratio
Economic profit margin²	-9.31%	-9.31%	-6.34%	-10.76%	-8.87%	-5.98%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	—	-2.97%	0.30%	0.95%	-4.55%	-7.16%
Cigna Group	—	-1.00%	0.37%	-0.11%	1.58%	-0.32%
CVS Health Corp.	—	0.17%	-1.54%	-0.01%	0.22%	-0.19%
Elevance Health Inc.	—	-0.42%	-0.09%	0.50%	-0.43%	-0.04%
Humana Inc.	—	0.32%	0.74%	1.00%	2.74%	2.26%
Intuitive Surgical Inc.	—	5.26%	4.31%	16.21%	8.80%	18.72%
UnitedHealth Group Inc.	—	2.82%	2.42%	2.24%	2.62%	2.52%

Based on: 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), 10-K (reporting date: 2019-04-26).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × -3,017 ÷ 32,412 = -9.31%

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.	Medtronic PLC economic profit margin deteriorated from 2022 to 2023 and from 2023 to 2024.

Medtronic PLC (NYSE:MDT)

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