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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

Abiomed Inc., economic profit calculation

US$ in thousands

12 months ended:	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Net operating profit after taxes (NOPAT)¹	140,811)	259,982)	239,725)	253,605)	159,878)	79,888)
Cost of capital²	16.62%	16.63%	16.62%	16.62%	16.63%	16.58%
Invested capital³	693,367)	737,876)	594,867)	497,537)	273,719)	226,723)

Economic profit⁴	25,554)	137,279)	140,877)	170,932)	114,367)	42,302)

Based on: 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), 10-K (reporting date: 2017-03-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 140,811 – 16.62% × 693,367 = 25,554

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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.	Abiomed Inc. economic profit decreased from 2020 to 2021 and from 2021 to 2022.

Abiomed Inc., NOPAT calculation

US$ in thousands

12 months ended:	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Net income	136,505)	225,525)	203,009)	259,016)	112,170)	52,116)
Deferred income tax expense (benefit)¹	2,413)	29,380)	32,953)	(7,745)	42,624)	25,803)
Increase (decrease) in allowance for credit losses²	(150)	(428)	162)	720)	38)	158)
Increase (decrease) in deferred revenue³	2,040)	5,175)	2,754)	1,423)	4,475)	1,717)
Increase (decrease) in product warranty⁴	(118)	235)	546)	191)	364)	(281)
Increase (decrease) in equity equivalents⁵	4,185)	34,362)	36,415)	(5,411)	47,501)	27,397)
Interest expense	—)	—)	—)	—)	302)	354)
Interest expense, operating lease liability⁶	153)	120)	381)	—)	—)	223)
Adjusted interest expense	153)	120)	381)	—)	302)	577)
Tax benefit of interest expense⁷	(32)	(25)	(80)	—)	(95)	(202)
Adjusted interest expense, after taxes⁸	121)	95)	301)	—)	207)	375)
Net operating profit after taxes (NOPAT)	140,811)	259,982)	239,725)	253,605)	159,878)	79,888)

Based on: 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), 10-K (reporting date: 2017-03-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in product warranty.

⁵ Addition of increase (decrease) in equity equivalents to net income.

⁶ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 9,507 × 1.61% = 153

⁷ 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 153 × 21.00% = 32

⁸ Addition of after taxes interest expense to net 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.	Abiomed Inc. NOPAT increased from 2020 to 2021 but then decreased significantly from 2021 to 2022.

Abiomed Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Income tax provision	54,055)	62,695)	53,816)	4,344)	48,267)	39,227)
Less: Deferred income tax expense (benefit)	2,413)	29,380)	32,953)	(7,745)	42,624)	25,803)
Add: Tax savings from interest expense	32)	25)	80)	—)	95)	202)
Cash operating taxes	51,674)	33,340)	20,943)	12,089)	5,738)	13,626)

Based on: 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), 10-K (reporting date: 2017-03-31).

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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.	Abiomed Inc. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022.

Abiomed Inc., invested capital calculation (financing approach)

US$ in thousands

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Current portion of capital lease obligation	—)	—)	—)	—)	—)	799)
Capital lease obligation, net of current portion	—)	—)	—)	—)	—)	15,539)
Operating lease liability¹	9,507)	6,116)	12,220)	14,274)	10,089)	7,462)
Total reported debt & leases	9,507)	6,116)	12,220)	14,274)	10,089)	23,800)
Stockholders’ equity	1,503,326)	1,329,675)	1,065,466)	936,890)	689,524)	452,071)
Net deferred tax (assets) liabilities²	(9,771)	(10,533)	(42,530)	(76,680)	(69,843)	(33,940)
Allowance for credit losses³	624)	774)	1,202)	1,040)	320)	282)
Deferred revenue⁴	26,362)	24,322)	19,147)	16,393)	14,970)	10,495)
Product warranty⁵	1,935)	2,053)	1,818)	1,272)	1,081)	717)
Equity equivalents⁶	19,150)	16,616)	(20,363)	(57,975)	(53,472)	(22,446)
Accumulated other comprehensive (income) loss, net of tax⁷	27,160)	11,445)	11,189)	14,689)	4,204)	20,606)
Adjusted stockholders’ equity	1,549,636)	1,357,736)	1,056,292)	893,604)	640,256)	450,231)
Construction in progress⁸	(19,898)	(10,906)	(15,075)	(17,946)	(19,850)	(9,257)
Marketable securities⁹	(845,878)	(615,070)	(458,570)	(392,395)	(356,776)	(238,051)
Invested capital	693,367)	737,876)	594,867)	497,537)	273,719)	226,723)

Based on: 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), 10-K (reporting date: 2017-03-31).

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 product warranty.

⁶ Addition of equity equivalents to stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of construction in progress.

⁹ Subtraction of marketable 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.	Abiomed Inc. invested capital increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Abiomed Inc., cost of capital calculations

Mar 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	10,741,698)	10,741,698)	÷	10,751,205)	=	1.00	1.00	×	16.64%	=	16.62%
Capital lease obligation³	—)	—)	÷	10,751,205)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	9,507)	9,507)	÷	10,751,205)	=	0.00	0.00	×	1.61% × (1 – 21.00%)	=	0.00%
Total:	10,751,205)					1.00					16.62%

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

¹ US$ in thousands

² Equity. See details »

³ Capital lease obligation. See details »

⁴ Operating lease liability. See details »

Mar 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	12,682,874)	12,682,874)	÷	12,688,990)	=	1.00	1.00	×	16.64%	=	16.63%
Capital lease obligation³	—)	—)	÷	12,688,990)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	6,116)	6,116)	÷	12,688,990)	=	0.00	0.00	×	1.96% × (1 – 21.00%)	=	0.00%
Total:	12,688,990)					1.00					16.63%

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

¹ US$ in thousands

² Equity. See details »

³ Capital lease obligation. See details »

⁴ Operating lease liability. See details »

Mar 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	8,825,950)	8,825,950)	÷	8,838,170)	=	1.00	1.00	×	16.64%	=	16.61%
Capital lease obligation³	—)	—)	÷	8,838,170)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	12,220)	12,220)	÷	8,838,170)	=	0.00	0.00	×	3.12% × (1 – 21.00%)	=	0.00%
Total:	8,838,170)					1.00					16.62%

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

¹ US$ in thousands

² Equity. See details »

³ Capital lease obligation. See details »

⁴ Operating lease liability. See details »

Mar 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	11,851,559)	11,851,559)	÷	11,865,833)	=	1.00	1.00	×	16.64%	=	16.62%
Capital lease obligation³	—)	—)	÷	11,865,833)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	14,274)	14,274)	÷	11,865,833)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Total:	11,865,833)					1.00					16.62%

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

¹ US$ in thousands

² Equity. See details »

³ Capital lease obligation. See details »

⁴ Operating lease liability. See details »

Mar 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,544,728)	17,544,728)	÷	17,554,817)	=	1.00	1.00	×	16.64%	=	16.63%
Capital lease obligation³	—)	—)	÷	17,554,817)	=	0.00	0.00	×	0.00% × (1 – 31.50%)	=	0.00%
Operating lease liability⁴	10,089)	10,089)	÷	17,554,817)	=	0.00	0.00	×	0.00% × (1 – 31.50%)	=	0.00%
Total:	17,554,817)					1.00					16.63%

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

¹ US$ in thousands

² Equity. See details »

³ Capital lease obligation. See details »

⁴ Operating lease liability. See details »

Mar 31, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	5,954,171)	5,954,171)	÷	5,977,971)	=	1.00	1.00	×	16.64%	=	16.57%
Capital lease obligation³	16,338)	16,338)	÷	5,977,971)	=	0.00	0.00	×	2.99% × (1 – 35.00%)	=	0.01%
Operating lease liability⁴	7,462)	7,462)	÷	5,977,971)	=	0.00	0.00	×	2.99% × (1 – 35.00%)	=	0.00%
Total:	5,977,971)					1.00					16.58%

Based on: 10-K (reporting date: 2017-03-31).

¹ US$ in thousands

² Equity. See details »

³ Capital lease obligation. See details »

⁴ Operating lease liability. See details »

Abiomed Inc., economic spread ratio calculation, comparison to benchmarks

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	25,554)	137,279)	140,877)	170,932)	114,367)	42,302)
Invested capital²	693,367)	737,876)	594,867)	497,537)	273,719)	226,723)
Performance Ratio
Economic spread ratio³	3.69%	18.60%	23.68%	34.36%	41.78%	18.66%
Benchmarks
Economic Spread Ratio, Competitors⁴
Abbott Laboratories	0.34%	0.79%	-2.48%	-3.80%	—	—
Cigna Group	0.80%	-0.19%	2.71%	-0.50%	—	—
CVS Health Corp.	-3.98%	-0.01%	0.44%	-0.34%	—	—
Elevance Health Inc.	-0.07%	1.20%	-0.79%	0.05%	—	—
Humana Inc.	2.37%	2.71%	9.57%	7.71%	—	—
Intuitive Surgical Inc.	5.39%	21.01%	8.99%	25.68%	—	—
Medtronic PLC	-2.47%	-4.06%	-3.19%	-2.10%	-5.69%	—
Shockwave Medical Inc.	26.10%	-16.37%	-82.54%	-43.53%	—	—
UnitedHealth Group Inc.	4.76%	4.62%	5.19%	5.22%	—	—

Based on: 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), 10-K (reporting date: 2017-03-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 25,554 ÷ 693,367 = 3.69%

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.	Abiomed Inc. economic spread ratio deteriorated from 2020 to 2021 and from 2021 to 2022.

Abiomed Inc., economic profit margin calculation, comparison to benchmarks

	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020	Mar 31, 2019	Mar 31, 2018	Mar 31, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	25,554)	137,279)	140,877)	170,932)	114,367)	42,302)

Revenue	1,031,753)	847,522)	840,883)	769,432)	593,749)	445,304)
Add: Increase (decrease) in deferred revenue	2,040)	5,175)	2,754)	1,423)	4,475)	1,717)
Adjusted revenue	1,033,793)	852,697)	843,637)	770,855)	598,224)	447,021)
Performance Ratio
Economic profit margin²	2.47%	16.10%	16.70%	22.17%	19.12%	9.46%
Benchmarks
Economic Profit Margin, Competitors³
Abbott Laboratories	0.48%	1.13%	-4.33%	-6.93%	—	—
Cigna Group	0.38%	-0.10%	1.59%	-0.31%	—	—
CVS Health Corp.	-1.53%	0.00%	0.22%	-0.18%	—	—
Elevance Health Inc.	-0.03%	0.56%	-0.37%	0.03%	—	—
Humana Inc.	0.75%	1.00%	2.75%	2.26%	—	—
Intuitive Surgical Inc.	4.66%	16.53%	9.22%	19.02%	—	—
Medtronic PLC	-5.42%	-9.73%	-7.85%	-4.98%	-13.46%	—
Shockwave Medical Inc.	16.95%	-12.03%	-111.13%	-160.90%	—	—
UnitedHealth Group Inc.	2.44%	2.27%	2.65%	2.55%	—	—

Based on: 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), 10-K (reporting date: 2017-03-31).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × 25,554 ÷ 1,033,793 = 2.47%

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.	Abiomed Inc. economic profit margin deteriorated from 2020 to 2021 and from 2021 to 2022.

Abiomed Inc. (NASDAQ:ABMD)

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