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
Autodesk Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
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
= 493 – 22.07% × 7,325 = -1,123
The financial performance between 2019 and 2024 is characterized by a persistent inability to generate consistent economic profit, with value destruction occurring in five of the six years analyzed. Despite significant fluctuations in operational profitability and a steady increase in the capital base, the returns remained largely insufficient to cover the established cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrated high volatility throughout the period. Following a low of US$ 41 million in 2019, a sharp increase to US$ 1,197 million occurred in 2020. Profits fluctuated over the subsequent years, reaching a peak of US$ 1,402 million in 2023, before experiencing a significant contraction to US$ 493 million in 2024.
- Cost of Capital
- The cost of capital remained remarkably stable, fluctuating within a very narrow corridor between 21.55% and 22.30%. This consistency indicates a steady hurdle rate that the organization was required to meet to create economic value.
- Invested Capital
- A consistent growth trend was observed in invested capital, which rose from US$ 4,412 million in 2019 to a peak of US$ 7,372 million in 2023. A slight reduction to US$ 7,325 million was noted in 2024, suggesting a period of capital expansion followed by a recent plateau.
- Economic Profit
- Economic profit remained predominantly negative, signaling that the company failed to generate returns above its cost of capital for the majority of the period. A brief transition to a marginally positive state occurred in 2020 (US$ 4 million), but this was not sustained. The trend culminated in a significant deficit of US$ 1,123 million in 2024, the lowest point in the analyzed period, driven by the combination of declining NOPAT and a high, stable cost of capital applied to a large base of invested capital.
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Net Operating Profit after Taxes (NOPAT)
Autodesk Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
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 restructuring and other exit costs reserve.
5 Addition of increase (decrease) in equity equivalents to net income (loss).
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 342 × 2.86% = 10
7 2024 Calculation
Tax benefit of interest and investment income (expense), net = Adjusted interest and investment income (expense), net × Statutory income tax rate
= -16 × 21.00% = -3
8 Addition of after taxes interest expense to net income (loss).
An analysis of the financial performance from 2019 to 2024 reveals significant volatility in both net income and net operating profit after taxes (NOPAT). While net income has transitioned from a deficit to a sustained positive trajectory, NOPAT has exhibited a more erratic pattern, characterized by sharp peaks and a substantial decline in the final year of the period.
- Net Income Trends
- Net income experienced a volatile recovery, beginning with a loss of 81 million USD in 2019 and rising to a peak of 1,208 million USD in 2021. Following a sharp decline to 497 million USD in 2022, the metric showed steady growth over the subsequent two years, reaching 906 million USD by January 31, 2024.
- NOPAT Performance and Volatility
- The net operating profit after taxes demonstrated extreme fluctuations. After a modest start of 41 million USD in 2019, NOPAT surged to 1,197 million USD in 2020. Despite a dip in 2021, it climbed to a period high of 1,402 million USD in 2023 before experiencing a severe contraction to 493 million USD in 2024, representing a decrease of approximately 65% from its peak.
- Divergence Between Operating Profit and Net Income
- A notable divergence between NOPAT and net income is observed in several periods. In 2019, NOPAT remained positive despite a net loss, suggesting that core operations were profitable while non-operating expenses or losses pressured the bottom line. Conversely, by January 31, 2024, net income of 906 million USD significantly exceeded NOPAT of 493 million USD, indicating that a substantial portion of the final profit was derived from non-operating sources rather than core operational efficiency.
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Cash Operating Taxes
Autodesk Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
An examination of the tax-related outflows reveals a general upward trend in cash operating taxes over the analyzed period, characterized by significant volatility in accounting tax provisions. While cash taxes show a long-term increase, the income tax provision exhibits extreme fluctuations, suggesting a divergence between accrual-based tax accounting and actual cash disbursements.
- Cash Operating Tax Trends
- Cash operating taxes grew steadily from 64 million USD in 2019 to 130 million USD in 2021. After a slight contraction to 100 million USD in 2022, a substantial spike occurred in 2023, reaching a peak of 415 million USD. Although this figure moderated to 310 million USD in 2024, it remained significantly higher than the baseline levels observed between 2019 and 2022.
- Income Tax Provision Dynamics
- The income tax provision displayed extreme variability, most notably in 2021 when a tax benefit of 662 million USD was recorded. Following this outlier, the provision returned to a positive expense, increasing sequentially from 68 million USD in 2022 to 230 million USD in 2024, indicating a return to a normalized and increasing tax expense trajectory.
- Analysis of Accrual versus Cash Divergence
- A notable disconnect is observed between the income tax provision and actual cash operating taxes. In 2021, despite recording a significant accounting tax benefit, the entity maintained a cash tax outflow of 130 million USD. Furthermore, in 2023, cash operating taxes of 415 million USD far exceeded the reported provision of 123 million USD, highlighting periods of significant variance between reported tax expenses and actual liquidity outflows.
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Invested Capital
Autodesk Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
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 restructuring and other exit costs reserve.
6 Addition of equity equivalents to stockholders’ equity (deficit).
7 Removal of accumulated other comprehensive income.
8 Subtraction of marketable securities.
Invested capital exhibited a consistent growth trajectory from 2019 through 2023, before stabilizing in 2024. The total capital base expanded from 4,412 million US dollars in 2019 to a peak of 7,372 million US dollars in 2023, representing a substantial increase in the resources deployed to generate economic value.
- Invested Capital Trends
- A steady upward trend is observed between 2019 and 2023, with the most significant annual increase occurring between 2019 and 2020. By 2024, the invested capital leveled off at 7,325 million US dollars, indicating a phase of capital stabilization following several years of expansion.
- Stockholders' Equity Transition
- A notable shift in the capital structure occurred between 2020 and 2021, where the stockholders' equity transitioned from a deficit of 139 million US dollars to a positive position of 966 million US dollars. This positive trajectory continued through 2024, reaching 1,855 million US dollars, which suggests a strengthening of the internal equity base and a reduction in reliance on external funding for capital growth.
- Debt and Lease Obligations
- Total reported debt and leases demonstrated volatility over the six-year period. After a decline to 2,105 million US dollars in 2021, obligations peaked at 3,060 million US dollars in 2022. Subsequently, a gradual reduction was observed, with the balance settling at 2,626 million US dollars by 2024.
The overall analysis indicates a strategic shift in the composition of invested capital. While early growth in the period was characterized by a deficit in stockholders' equity, the subsequent years show a transition toward a more robust equity-funded capital structure, coinciding with the stabilization of total invested capital in 2024.
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Cost of Capital
Autodesk Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 47,011) | 47,011) | ÷ | 49,431) | = | 0.95 | 0.95 | × | 23.08% | = | 21.95% | ||
| Long-term notes payable, including current portion3 | 2,078) | 2,078) | ÷ | 49,431) | = | 0.04 | 0.04 | × | 3.04% × (1 – 21.00%) | = | 0.10% | ||
| Operating lease liability4 | 342) | 342) | ÷ | 49,431) | = | 0.01 | 0.01 | × | 2.86% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 49,431) | 1.00 | 22.07% | ||||||||||
Based on: 10-K (reporting date: 2024-01-31).
1 US$ in millions
2 Equity. See details »
3 Long-term notes payable, including current portion. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 42,789) | 42,789) | ÷ | 45,235) | = | 0.95 | 0.95 | × | 23.08% | = | 21.83% | ||
| Long-term notes payable, including current portion3 | 2,061) | 2,061) | ÷ | 45,235) | = | 0.05 | 0.05 | × | 3.04% × (1 – 21.00%) | = | 0.11% | ||
| Operating lease liability4 | 385) | 385) | ÷ | 45,235) | = | 0.01 | 0.01 | × | 2.60% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 45,235) | 1.00 | 21.96% | ||||||||||
Based on: 10-K (reporting date: 2023-01-31).
1 US$ in millions
2 Equity. See details »
3 Long-term notes payable, including current portion. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 41,006) | 41,006) | ÷ | 44,100) | = | 0.93 | 0.93 | × | 23.08% | = | 21.46% | ||
| Long-term notes payable, including current portion3 | 2,662) | 2,662) | ÷ | 44,100) | = | 0.06 | 0.06 | × | 3.10% × (1 – 21.00%) | = | 0.15% | ||
| Operating lease liability4 | 432) | 432) | ÷ | 44,100) | = | 0.01 | 0.01 | × | 2.46% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 44,100) | 1.00 | 21.63% | ||||||||||
Based on: 10-K (reporting date: 2022-01-31).
1 US$ in millions
2 Equity. See details »
3 Long-term notes payable, including current portion. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 57,423) | 57,423) | ÷ | 59,706) | = | 0.96 | 0.96 | × | 23.08% | = | 22.20% | ||
| Long-term notes payable, including current portion3 | 1,815) | 1,815) | ÷ | 59,706) | = | 0.03 | 0.03 | × | 3.49% × (1 – 21.00%) | = | 0.08% | ||
| Operating lease liability4 | 467) | 467) | ÷ | 59,706) | = | 0.01 | 0.01 | × | 2.69% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 59,706) | 1.00 | 22.30% | ||||||||||
Based on: 10-K (reporting date: 2021-01-31).
1 US$ in millions
2 Equity. See details »
3 Long-term notes payable, including current portion. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 32,759) | 32,759) | ÷ | 35,415) | = | 0.93 | 0.93 | × | 23.08% | = | 21.35% | ||
| Long-term notes payable, including current portion3 | 2,196) | 2,196) | ÷ | 35,415) | = | 0.06 | 0.06 | × | 3.42% × (1 – 21.00%) | = | 0.17% | ||
| Operating lease liability4 | 460) | 460) | ÷ | 35,415) | = | 0.01 | 0.01 | × | 3.41% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 35,415) | 1.00 | 21.55% | ||||||||||
Based on: 10-K (reporting date: 2020-01-31).
1 US$ in millions
2 Equity. See details »
3 Long-term notes payable, including current portion. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 33,960) | 33,960) | ÷ | 35,895) | = | 0.95 | 0.95 | × | 23.08% | = | 21.83% | ||
| Long-term notes payable, including current portion3 | 1,578) | 1,578) | ÷ | 35,895) | = | 0.04 | 0.04 | × | 3.58% × (1 – 21.00%) | = | 0.12% | ||
| Operating lease liability4 | 357) | 357) | ÷ | 35,895) | = | 0.01 | 0.01 | × | 3.58% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 35,895) | 1.00 | 21.99% | ||||||||||
Based on: 10-K (reporting date: 2019-01-31).
1 US$ in millions
2 Equity. See details »
3 Long-term notes payable, including current portion. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Autodesk Inc., economic spread ratio calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (1,123) | (217) | (508) | (444) | 4) | (929) | |
| Invested capital2 | 7,325) | 7,372) | 6,835) | 5,723) | 5,535) | 4,412) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -15.33% | -2.94% | -7.43% | -7.75% | 0.07% | -21.05% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Accenture PLC | 0.34% | 1.12% | 3.99% | 5.81% | 6.41% | — | |
| Adobe Inc. | 0.92% | 1.09% | 6.58% | 8.97% | 1.25% | — | |
| AppLovin Corp. | 1.21% | -20.00% | -26.37% | -29.58% | — | — | |
| Cadence Design Systems Inc. | -2.87% | 7.18% | 6.59% | 6.80% | — | — | |
| Datadog Inc. | -9.43% | -5.95% | -11.70% | -3.88% | — | — | |
| International Business Machines Corp. | -7.67% | -3.61% | -11.36% | -6.21% | — | — | |
| Intuit Inc. | -6.58% | -8.63% | -7.52% | 0.11% | — | — | |
| Microsoft Corp. | 7.51% | 10.56% | 18.54% | 27.58% | — | — | |
| Oracle Corp. | -7.76% | -8.56% | -7.56% | 0.65% | — | — | |
| Palantir Technologies Inc. | -12.04% | -8.76% | -32.50% | -39.96% | — | — | |
| Palo Alto Networks Inc. | 5.37% | 11.50% | 3.53% | -5.17% | — | — | |
| Salesforce Inc. | -14.18% | -17.63% | -14.50% | -12.36% | — | — | |
| ServiceNow Inc. | 5.94% | 5.23% | 0.73% | 1.94% | — | — | |
| Synopsys Inc. | -8.14% | -7.44% | -0.84% | -6.86% | -6.67% | — | |
| Workday Inc. | -12.93% | -19.15% | -13.98% | -19.23% | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,123 ÷ 7,325 = -15.33%
4 Click competitor name to see calculations.
The financial performance over the six-year period ending January 31, 2024, is characterized by a persistent inability to generate positive economic value, despite a significant expansion of the invested capital base.
- Economic Profit Trends
- Economic profit remained predominantly negative, indicating that the returns generated were insufficient to cover the cost of capital. While a marginal positive value of 4 million US dollars was achieved in 2020, the subsequent years showed recurring deficits. A significant deterioration is observed in the final period, with economic profit dropping to its lowest point of -1,123 million US dollars on January 31, 2024.
- Invested Capital Trajectory
- Invested capital exhibited a consistent growth trend from 2019 through 2023, rising from 4,412 million US dollars to 7,372 million US dollars. This indicates a steady increase in the resources deployed into the business. A slight plateau occurred in 2024, with invested capital ending at 7,325 million US dollars.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrors the volatility of the economic profit, reflecting the gap between the return on invested capital and the cost of capital. After starting at -21.05% in 2019, the ratio reached a peak of 0.07% in 2020 and showed signs of gradual recovery reaching -2.94% by 2023. However, this trend reversed sharply in 2024, with the ratio falling to -15.33%, signifying a substantial decrease in economic efficiency and a failure to create value for shareholders during the final reporting period.
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Economic Profit Margin
Autodesk Inc., economic profit margin calculation, comparison to benchmarks
| Jan 31, 2024 | Jan 31, 2023 | Jan 31, 2022 | Jan 31, 2021 | Jan 31, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (1,123) | (217) | (508) | (444) | 4) | (929) | |
| Net revenue | 5,497) | 5,005) | 4,386) | 3,790) | 3,274) | 2,570) | |
| Add: Increase (decrease) in deferred revenue | (316) | 790) | 430) | 353) | 916) | 136) | |
| Adjusted net revenue | 5,181) | 5,795) | 4,816) | 4,144) | 4,190) | 2,706) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -21.68% | -3.74% | -10.54% | -10.70% | 0.09% | -34.32% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Accenture PLC | 0.19% | 0.58% | 1.92% | 2.98% | 3.26% | — | |
| Adobe Inc. | 1.04% | 1.37% | 7.67% | 11.17% | 1.79% | — | |
| AppLovin Corp. | 1.17% | -27.38% | -49.38% | -59.23% | — | — | |
| Cadence Design Systems Inc. | -4.40% | 7.15% | 6.57% | 6.91% | — | — | |
| Datadog Inc. | -8.56% | -3.72% | -8.10% | -3.08% | — | — | |
| International Business Machines Corp. | -13.55% | -6.43% | -19.67% | -11.82% | — | — | |
| Intuit Inc. | -10.11% | -14.13% | -14.48% | 0.14% | — | — | |
| Microsoft Corp. | 10.50% | 12.02% | 17.77% | 22.89% | — | — | |
| Oracle Corp. | -14.76% | -16.57% | -13.87% | 1.29% | — | — | |
| Palantir Technologies Inc. | -10.44% | -4.70% | -54.53% | -65.82% | — | — | |
| Palo Alto Networks Inc. | 5.70% | 11.42% | 4.11% | -6.95% | — | — | |
| Salesforce Inc. | -32.78% | -44.58% | -40.27% | -28.34% | — | — | |
| ServiceNow Inc. | 4.88% | 4.21% | 0.58% | 1.68% | — | — | |
| Synopsys Inc. | -13.64% | -10.49% | -1.18% | -10.92% | -11.45% | — | |
| Workday Inc. | -14.39% | -23.49% | -18.95% | -25.09% | — | — | |
Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × -1,123 ÷ 5,181 = -21.68%
3 Click competitor name to see calculations.
The financial trajectory from 2019 to 2024 reflects a period of significant volatility in economic value generation, characterized by a general failure to consistently exceed the cost of capital despite a period of substantial revenue growth.
- Economic Profit Trends
- Economic profit remained negative for five of the six observed fiscal years. Following a deficit of US$ 929 million in 2019, a brief recovery occurred in 2020, reaching a marginal positive value of US$ 4 million. However, subsequent years saw a return to negative territory, culminating in a significant loss of US$ 1,123 million in 2024, marking the lowest absolute economic profit within the analyzed timeframe.
- Adjusted Net Revenue Performance
- An upward trajectory in adjusted net revenue was observed between 2019 and 2023, with figures rising from US$ 2,706 million to a peak of US$ 5,795 million. This expansionary phase was interrupted in 2024, when revenue declined to US$ 5,181 million, coinciding with the sharpest increase in economic profit losses.
- Economic Profit Margin Volatility
- The economic profit margin exhibited extreme fluctuations over the period. After starting at -34.32% in 2019, the margin improved to 0.09% in 2020. A period of gradual stabilization followed from 2021 to 2023, with the margin moving from -10.70% to -3.74%. This recovery was sharply reversed in 2024, as the margin deteriorated to -21.68%.
The correlation between the decline in adjusted net revenue and the expansion of the economic profit deficit in 2024 suggests a significant contraction in value creation. The inability to maintain a positive economic profit margin over the majority of the period indicates that the returns generated on invested capital have frequently remained below the required cost of capital.
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