Economic Value Added (EVA)
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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.
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Economic Profit
Schlumberger Ltd., economic profit calculation
US$ in millions
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibited a significant turnaround from a substantial loss of US$11,275 million at the end of 2020 to positive figures in subsequent years. It increased to US$2,298 million in 2021, then rose steadily each year to US$4,815 million by the end of 2024. This trend indicates a strong recovery and consistent improvement in operating profitability over the period.
- Cost of Capital
- The cost of capital showed an upward trend from 12.95% in 2020 to a peak of 17.55% in 2022, followed by a slight decline to 16.82% in 2024. The initial increase suggests growing expense or risk perceived in financing the company's operations, which then marginally eased but remained elevated compared to the starting point.
- Invested Capital
- Invested capital experienced moderate fluctuations over the years. It slightly decreased from US$33,428 million in 2020 to US$32,896 million in 2021, then increased gradually, reaching US$39,383 million by the end of 2024. This progression indicates ongoing investments or asset base expansion after an initial contraction.
- Economic Profit
- Economic profit remained negative throughout the period, although the magnitude of the loss decreased significantly. Starting at a deficit of US$15,603 million in 2020, the loss narrowed to US$1,811 million by 2024. Despite improvements, the company did not achieve positive economic profit, suggesting that returns did not fully exceed the cost of capital during these years.
Net Operating Profit after Taxes (NOPAT)
Schlumberger Ltd., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for doubtful accounts.
3 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to SLB.
4 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income (loss) attributable to SLB.
7 2024 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 income (loss) attributable to SLB
- The net income attributable to SLB demonstrates a significant recovery trend over the observed period. In 2020, the company reported a substantial loss of approximately 10.5 billion US dollars. However, this was followed by a marked turnaround in 2021, reaching a positive net income of about 1.9 billion US dollars. The subsequent years show consistent growth, with net income increasing to 3.4 billion in 2022, 4.2 billion in 2023, and 4.5 billion US dollars in 2024. This progression indicates improving profitability and effective management responses to prior challenges.
- Net operating profit after taxes (NOPAT)
- NOPAT mirrors the trends observed in net income, starting from a significant negative value of around 11.3 billion US dollars in 2020. Following this, there is a steady and considerable improvement, with the figure rising to approximately 2.3 billion in 2021. The upward trajectory continues through 2022 to 2024, with NOPAT reaching 3.8 billion, then 4.6 billion, and finally stabilizing near 4.8 billion US dollars. This consistent increase highlights enhanced operational efficiency and profitability after tax expenses.
- Overall Observations
- Both key profitability metrics exhibit a substantial recovery from profound losses in 2020 to solid gains by 2024. The steady annual increases suggest that the company implemented effective strategies to reverse losses and improve financial health. The close alignment between net income and NOPAT trends indicates sound operational performance and improved tax management over the period analyzed.
Cash Operating Taxes
Schlumberger Ltd., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
The financial data indicates a consistent and rising trend in the tax expense (benefit) over the observed periods. Starting from a negative tax expense (benefit) of -812 million US dollars in 2020, the figure turned positive and increased substantially to 446 million in 2021. Thereafter, the tax expense showed a steady upward trajectory, reaching 779 million in 2022, 1007 million in 2023, and further climbing to 1093 million in 2024. This progression suggests an improvement in profitability or taxable income over the years, as tax expenses tend to correlate positively with earnings before tax.
In parallel, cash operating taxes also exhibited a similar expanding trend. Beginning at 546 million US dollars in 2020, cash operating taxes rose moderately to 579 million in 2021, followed by a significant increase to 905 million in 2022. This growth continued in 2023 with cash operating taxes amounting to 1070 million, and further to 1211 million in 2024. The consistent increase in cash operating taxes aligns with the upward movement in reported tax expense, indicating sustained growth in taxable cash flows and possibly improved operational performance.
The simultaneous increase observed in both tax expense and cash operating taxes over the five-year period reflects an overall positive financial trajectory. The data implies enhanced earnings capacity, higher taxable income, and an expanding tax liability footprint, which typically signals operational growth and improving economic conditions for the company.
Invested Capital
Schlumberger Ltd., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 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).
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 equity equivalents to total SLB stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of marketable securities.
- Total reported debt & leases
- There is a consistent downward trend in total reported debt and leases from 2020 through 2023, decreasing from 17,897 million USD in 2020 to 12,775 million USD in 2023. In 2024, the debt level stabilized, showing a slight increase to 12,816 million USD. Overall, this indicates a reduction in leverage over the five-year period, with a significant decrease in the first three years followed by stabilization.
- Total SLB stockholders’ equity
- Stockholders’ equity exhibits a steady and significant upward trend throughout the entire period. It grew from 12,071 million USD in 2020 to 21,130 million USD in 2024, showing sustained capital accumulation and increased net asset value. This growth suggests strengthening financial stability and potentially successful retention of earnings or capital infusions.
- Invested capital
- Invested capital showed a slight decline from 33,428 million USD in 2020 to 32,896 million USD in 2021, followed by a modest increase to 33,931 million USD in 2022. From 2022 onward, the invested capital rose noticeably, reaching 39,383 million USD in 2024. This trend implies increasing investment activities or asset base expansion in the latter years, reflecting growth initiatives or capital expenditures.
Cost of Capital
Schlumberger Ltd., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
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 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Schlumberger Ltd., economic spread ratio calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
- Economic Profit
- The economic profit has demonstrated a consistent improvement over the five-year period, starting from a significant negative value of -15,603 million US dollars in 2020 and decreasing in magnitude to -1,811 million US dollars by 2024. Despite remaining negative throughout, the rate of decline in losses suggests improving profitability or efficiency in capital utilization.
- Invested Capital
- Invested capital has shown a general upward trend, rising from 33,428 million US dollars in 2020 to 39,383 million US dollars in 2024. The investment growth indicates ongoing capital deployment, with the most notable increase occurring between 2022 and 2023, reflecting possible expansion or reinvestment activities in the business.
- Economic Spread Ratio
- The economic spread ratio, which reflects the profitability of the invested capital, has improved steadily from -46.68% in 2020 to -4.6% in 2024. Although the ratio remains negative, the narrowing gap indicates that returns are moving closer to breaking even, suggesting enhanced operational performance or better cost management over time.
Economic Profit Margin
Schlumberger Ltd., economic profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × ÷ =
- Revenue
- Revenue has shown a consistent upward trend over the analyzed periods, increasing from US$23,601 million in 2020 to US$36,289 million in 2024. This represents a notable growth trajectory, indicating an expanding operational scale or improved market conditions over the five years.
- Economic Profit
- Economic profit, while negative throughout the period, exhibits a marked improvement. The loss narrowed significantly from -US$15,603 million in 2020 to -US$1,811 million in 2024. This improvement suggests better cost management, enhanced profitability, or both, despite the ongoing negative figures.
- Economic Profit Margin
- The economic profit margin, expressed as a percentage, aligns with the trend in economic profit. Starting at a deeply negative -66.11% in 2020, it improved steadily to -4.99% by 2024. This consistent reduction in margin losses reflects a positive progression towards achieving economic profitability, although profitability has not yet been realized.
- Overall Insights
- The data portrays a company experiencing significant revenue growth accompanied by reductions in economic losses and improvements in economic profit margins. Despite persistent negative economic profit, the improving metrics indicate a positive trajectory in overall financial health and operational efficiency. Attention to continued improvement could potentially lead to a turnaround into positive economic profit in subsequent years.