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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

Deckers Outdoor Corp., economic profit calculation

US$ in thousands

12 months ended:	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018
Net operating profit after taxes (NOPAT)¹	502,935)	438,551)	385,286)	286,146)	281,186)	130,421)
Cost of capital²	12.32%	12.21%	12.29%	12.02%	12.02%	11.75%
Invested capital³	1,948,548)	1,736,074)	1,642,284)	1,422,595)	1,307,197)	1,227,436)

Economic profit⁴	262,798)	226,532)	183,497)	115,125)	124,069)	(13,812)

Based on: 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31).

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
= 502,935 – 12.32% × 1,948,548 = 262,798

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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.	Deckers Outdoor Corp. economic profit increased from 2021 to 2022 and from 2022 to 2023.

Deckers Outdoor Corp., NOPAT calculation

US$ in thousands

12 months ended:	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018
Net income	516,822)	451,949)	382,575)	276,142)	264,308)	114,394)
Deferred income tax expense (benefit)¹	(9,719)	(27,796)	(8,171)	2,934)	6,939)	8,138)
Increase (decrease) in allowance for doubtful accounts²	1,532)	(686)	2,741)	1,916)	1,586)	(2,492)
Increase (decrease) in deferred revenue³	(2,356)	10,379)	—)	—)	—)	—)
Increase (decrease) in equity equivalents⁴	(10,543)	(18,103)	(5,430)	4,850)	8,525)	5,646)
Interest expense	3,442)	2,083)	6,028)	5,046)	4,661)	4,585)
Interest expense, operating lease liability⁵	7,888)	5,774)	6,914)	8,739)	11,940)	13,631)
Adjusted interest expense	11,330)	7,857)	12,942)	13,785)	16,601)	18,216)
Tax benefit of interest expense⁶	(2,379)	(1,650)	(2,718)	(2,895)	(3,486)	(5,742)
Adjusted interest expense, after taxes⁷	8,950)	6,207)	10,224)	10,890)	13,115)	12,474)
Interest income	(15,563)	(1,901)	(2,637)	(7,261)	(6,028)	(3,057)
Investment income, before taxes	(15,563)	(1,901)	(2,637)	(7,261)	(6,028)	(3,057)
Tax expense (benefit) of investment income⁸	3,268)	399)	554)	1,525)	1,266)	964)
Investment income, after taxes⁹	(12,295)	(1,502)	(2,083)	(5,736)	(4,762)	(2,093)
Net operating profit after taxes (NOPAT)	502,935)	438,551)	385,286)	286,146)	281,186)	130,421)

Based on: 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31).

¹ Elimination of deferred tax expense. See details »

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

³ Addition of increase (decrease) in deferred revenue.

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

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 246,488 × 3.20% = 7,888

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 11,330 × 21.00% = 2,379

⁷ Addition of after taxes interest expense to net income.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 15,563 × 21.00% = 3,268

⁹ 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.	Deckers Outdoor Corp. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

Deckers Outdoor Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018
Income tax expense	149,260)	112,689)	118,939)	64,724)	64,626)	106,302)
Less: Deferred income tax expense (benefit)	(9,719)	(27,796)	(8,171)	2,934)	6,939)	8,138)
Add: Tax savings from interest expense	2,379)	1,650)	2,718)	2,895)	3,486)	5,742)
Less: Tax imposed on investment income	3,268)	399)	554)	1,525)	1,266)	964)
Cash operating taxes	158,090)	141,736)	129,274)	63,160)	59,907)	102,942)

Based on: 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31).

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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.	Deckers Outdoor Corp. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023.

Deckers Outdoor Corp., invested capital calculation (financing approach)

US$ in thousands

	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018
Short-term borrowings	—)	—)	—)	638)	603)	578)
Mortgage payable	—)	—)	—)	30,263)	30,901)	31,504)
Operating lease liability¹	246,488)	222,070)	223,042)	264,815)	242,193)	276,486)
Total reported debt & leases	246,488)	222,070)	223,042)	295,716)	273,697)	308,568)
Stockholders’ equity	1,765,733)	1,538,825)	1,444,225)	1,140,120)	1,045,130)	940,779)
Net deferred tax (assets) liabilities²	(72,592)	(64,217)	(37,194)	(28,233)	(30,870)	(38,381)
Allowance for doubtful accounts³	10,576)	9,044)	9,730)	6,989)	5,073)	3,487)
Deferred revenue⁴	13,448)	15,804)	—)	—)	—)	—)
Equity equivalents⁵	(48,568)	(39,369)	(27,464)	(21,244)	(25,797)	(34,894)
Accumulated other comprehensive (income) loss, net of tax⁶	39,035)	24,955)	16,743)	25,559)	22,654)	12,983)
Adjusted stockholders’ equity	1,756,200)	1,524,411)	1,433,504)	1,144,435)	1,041,987)	918,868)
Construction in progress⁷	(54,140)	(10,407)	(14,262)	(17,556)	(8,487)	—)
Invested capital	1,948,548)	1,736,074)	1,642,284)	1,422,595)	1,307,197)	1,227,436)

Based on: 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31).

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 deferred revenue.

⁵ Addition of equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of construction in progress.

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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.	Deckers Outdoor Corp. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Deckers Outdoor Corp., cost of capital calculations

Mar 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	12,169,037)	12,169,037)	÷	12,415,525)	=	0.98	0.98	×	12.52%	=	12.27%
Mortgage payable³	—)	—)	÷	12,415,525)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	246,488)	246,488)	÷	12,415,525)	=	0.02	0.02	×	3.20% × (1 – 21.00%)	=	0.05%
Total:	12,415,525)					1.00					12.32%

Based on: 10-K (reporting date: 2023-03-31).

¹ US$ in thousands

² Equity. See details »

³ Mortgage payable. See details »

⁴ Operating lease liability. See details »

Mar 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	7,282,824)	7,282,824)	÷	7,504,894)	=	0.97	0.97	×	12.52%	=	12.15%
Mortgage payable³	—)	—)	÷	7,504,894)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	222,070)	222,070)	÷	7,504,894)	=	0.03	0.03	×	2.60% × (1 – 21.00%)	=	0.06%
Total:	7,504,894)					1.00					12.21%

Based on: 10-K (reporting date: 2022-03-31).

¹ US$ in thousands

² Equity. See details »

³ Mortgage payable. See details »

⁴ Operating lease liability. See details »

Mar 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	9,329,600)	9,329,600)	÷	9,552,642)	=	0.98	0.98	×	12.52%	=	12.23%
Mortgage payable³	—)	—)	÷	9,552,642)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	223,042)	223,042)	÷	9,552,642)	=	0.02	0.02	×	3.10% × (1 – 21.00%)	=	0.06%
Total:	9,552,642)					1.00					12.29%

Based on: 10-K (reporting date: 2021-03-31).

¹ US$ in thousands

² Equity. See details »

³ Mortgage payable. See details »

⁴ Operating lease liability. See details »

Mar 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	5,482,856)	5,482,856)	÷	5,778,572)	=	0.95	0.95	×	12.52%	=	11.88%
Mortgage payable³	30,901)	30,901)	÷	5,778,572)	=	0.01	0.01	×	4.93% × (1 – 21.00%)	=	0.02%
Operating lease liability⁴	264,815)	264,815)	÷	5,778,572)	=	0.05	0.05	×	3.30% × (1 – 21.00%)	=	0.12%
Total:	5,778,572)					1.00					12.02%

Based on: 10-K (reporting date: 2020-03-31).

¹ US$ in thousands

² Equity. See details »

³ Mortgage payable. See details »

⁴ Operating lease liability. See details »

Mar 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	4,421,716)	4,421,716)	÷	4,695,413)	=	0.94	0.94	×	12.52%	=	11.79%
Mortgage payable³	31,504)	31,504)	÷	4,695,413)	=	0.01	0.01	×	4.93% × (1 – 21.00%)	=	0.03%
Operating lease liability⁴	242,193)	242,193)	÷	4,695,413)	=	0.05	0.05	×	4.93% × (1 – 21.00%)	=	0.20%
Total:	4,695,413)					1.00					12.02%

Based on: 10-K (reporting date: 2019-03-31).

¹ US$ in thousands

² Equity. See details »

³ Mortgage payable. See details »

⁴ Operating lease liability. See details »

Mar 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	3,349,259)	3,349,259)	÷	3,657,826)	=	0.92	0.92	×	12.52%	=	11.47%
Mortgage payable³	32,082)	32,082)	÷	3,657,826)	=	0.01	0.01	×	4.93% × (1 – 31.52%)	=	0.03%
Operating lease liability⁴	276,486)	276,486)	÷	3,657,826)	=	0.08	0.08	×	4.93% × (1 – 31.52%)	=	0.26%
Total:	3,657,826)					1.00					11.75%

Based on: 10-K (reporting date: 2018-03-31).

¹ US$ in thousands

² Equity. See details »

³ Mortgage payable. See details »

⁴ Operating lease liability. See details »

Deckers Outdoor Corp., economic spread ratio calculation, comparison to benchmarks

	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	262,798)	226,532)	183,497)	115,125)	124,069)	(13,812)
Invested capital²	1,948,548)	1,736,074)	1,642,284)	1,422,595)	1,307,197)	1,227,436)
Performance Ratio
Economic spread ratio³	13.49%	13.05%	11.17%	8.09%	9.49%	-1.13%
Benchmarks
Economic Spread Ratio, Competitors⁴
lululemon athletica inc.	4.56%	10.47%	2.35%	7.61%	5.34%	—
Nike Inc.	10.89%	12.62%	12.28%	-0.44%	15.60%	3.97%

Based on: 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 262,798 ÷ 1,948,548 = 13.49%

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.	Deckers Outdoor Corp. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023.

Deckers Outdoor Corp., economic profit margin calculation, comparison to benchmarks

	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	262,798)	226,532)	183,497)	115,125)	124,069)	(13,812)

Net sales	3,627,286)	3,150,339)	2,545,641)	2,132,689)	2,020,437)	1,903,339)
Add: Increase (decrease) in deferred revenue	(2,356)	10,379)	—)	—)	—)	—)
Adjusted net sales	3,624,930)	3,160,718)	2,545,641)	2,132,689)	2,020,437)	1,903,339)
Performance Ratio
Economic profit margin²	7.25%	7.17%	7.21%	5.40%	6.14%	-0.73%
Benchmarks
Economic Profit Margin, Competitors³
lululemon athletica inc.	2.53%	6.48%	1.95%	5.72%	3.97%	—
Nike Inc.	4.34%	5.71%	5.80%	-0.23%	5.65%	1.66%

Based on: 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31), 10-K (reporting date: 2019-03-31), 10-K (reporting date: 2018-03-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 262,798 ÷ 3,624,930 = 7.25%

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.	Deckers Outdoor Corp. economic profit margin deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Deckers Outdoor Corp. (NYSE:DECK)

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