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 – 22.33% × 7,325 = -1,142
An analysis of the financial performance from 2019 to 2024 reveals a persistent failure to generate positive economic profit, indicating that net operating returns have been insufficient to cover the cost of the capital employed over the entire period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibits significant volatility. After a sharp increase from US$ 41 million in 2019 to US$ 1,197 million in 2020, the metric fluctuated over the following years, reaching a peak of US$ 1,402 million in 2023. However, a substantial contraction occurred in 2024, with NOPAT falling to US$ 493 million.
- Invested Capital
- A consistent growth pattern in invested capital is observed from 2019 to 2023, increasing from US$ 4,412 million to US$ 7,372 million. This upward trajectory suggests an expansion of the capital base, which stabilized in 2024 at US$ 7,325 million.
- Cost of Capital
- The cost of capital remained remarkably stable throughout the six-year period, fluctuating minimally between 21.81% and 22.56%. This high and consistent hurdle rate imposes a significant requirement on operating profits to achieve positive economic value.
- Economic Profit
- Economic profit remained negative across all observed years, confirming that the company did not create economic value above its cost of capital. While the deficit narrowed to its lowest point in 2020 at -US$ 11 million, the trend reversed in later years. The most significant economic loss was recorded in 2024 at -US$ 1,142 million, resulting from the sharp decline in NOPAT combined with a high capital charge on 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).
- Net Income (Loss)
-
The net income demonstrates significant fluctuations over the observed periods. Starting from a loss of US$81 million in January 2019, the company experienced a substantial turnaround, achieving a positive net income of US$215 million in January 2020. This upward trend accelerated noticeably in January 2021, reaching a peak of US$1,208 million. Subsequently, net income declined to US$497 million in January 2022 but rebounded to US$823 million in January 2023 and further increased to US$906 million by January 2024. The data suggests a period of recovery and growth following an initial loss, followed by some volatility, with the most recent figures indicating a strengthening profit position.
- Net Operating Profit After Taxes (NOPAT)
-
NOPAT shows a rising trend from January 2019 through January 2023, starting at US$41 million and climbing consistently to a peak of US$1,402 million in January 2023. After a low base in 2019, there was a rapid increase to US$1,197 million in 2020, followed by a decrease to US$833 million in January 2021. NOPAT then resumed growth with US$970 million in January 2022 and peaked notably in January 2023. However, in January 2024, NOPAT declined sharply to US$493 million. This pattern indicates periods of strong operational profitability, especially between 2020 and 2023, though the most recent year shows a significant reduction.
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Cash Operating Taxes
Autodesk Inc., cash operating taxes calculation
US$ 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).
The financial data indicates notable fluctuations in both the income tax provision (benefit) and cash operating taxes over the analyzed periods.
- Income Tax Provision (Benefit)
-
The income tax provision demonstrates considerable volatility throughout the periods. Initially, it increased from 38 million USD in 2019 to 80 million USD in 2020, indicating a rising tax expense. However, in 2021, there is a significant benefit recorded, reflected by a negative provision of -662 million USD, which represents a tax benefit rather than an expense. This sharp reversal may suggest extraordinary tax adjustments or recognition of deferred tax assets during that period. Subsequent years show a return to positive provisions, rising from 68 million USD in 2022 to 123 million USD in 2023, and reaching 230 million USD in 2024, indicating increased tax expenses once again. Overall, the income tax provision reflects uneven tax charges with an exceptional benefit in 2021 followed by increasing tax liabilities.
- Cash Operating Taxes
-
Cash operating taxes display a generally upward trend across the years, with some variation in magnitude. Starting at 64 million USD in 2019, cash taxes increased slightly to 82 million USD in 2020. A more substantial rise is seen in 2021 with 130 million USD, despite the negative income tax provision in the same year, suggesting a divergence between cash taxes paid and accounting tax charges. Cash taxes decreased to 100 million USD in 2022 but then surged significantly to 415 million USD in 2023 before declining to 310 million USD in 2024. This pattern indicates increasing cash tax outflows, peaking in 2023, which might reflect higher taxable income or changes in tax payment schedules.
In summary, the data reveal inconsistencies between accounting tax provisions and cash tax payments, particularly highlighted by the negative income tax provision in 2021 juxtaposed with rising cash operating taxes. The overall trend suggests increasing tax-related cash outflows in recent years, and significant fluctuations in tax accounting entries, which could be attributable to changes in tax regulations, one-time adjustments, or differences in timing between tax accruals and payments.
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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.
The financial data presents a mixed set of trends over the six-year period ending in January 2024. The following analysis focuses on the reported debt and leases, stockholders’ equity, and invested capital, highlighting significant movements and potential implications.
- Total Reported Debt & Leases
- The debt and lease obligations experienced fluctuations over the period. Starting at 2,445 million USD in early 2019, the total increased slightly to 2,545 million USD by 2020, followed by a noticeable reduction to 2,105 million USD in 2021. However, debt levels surged again in 2022, reaching 3,060 million USD, which is the highest in the provided timeframe. Subsequently, it declined to 2,666 million USD in 2023 and further to 2,626 million USD in early 2024. The pattern suggests an overall cyclical adjustment in financing strategy, with a peak possibly reflecting increased borrowing or lease arrangements in 2022, and partial deleveraging thereafter.
- Stockholders’ Equity (Deficit)
- The stockholders’ equity profile shows a significant transformation from a deficit position to a positive equity base. At the start of 2019, equity was negative at -211 million USD, indicating liabilities exceeded assets. This deficit narrowed to -139 million USD in 2020 before turning positive at 966 million USD in 2021. Although there was a slight decrease to 849 million USD in 2022, the trend reversed with equity rising substantially to 1,145 million USD in 2023 and 1,855 million USD in 2024. This improvement demonstrates strengthening financial health, reflecting either retained earnings growth, capital injections, or asset revaluation effectively reducing the deficit and building shareholder value.
- Invested Capital
- Invested capital steadily increased over the analyzed periods. Commencing at 4,412 million USD in 2019, it rose to 5,535 million USD in 2020, and 5,723 million USD in 2021. Growth accelerated in the following years, reaching 6,835 million USD in 2022, peaking at 7,372 million USD in 2023, and slightly declining to 7,325 million USD in 2024. The general upward movement of invested capital suggests ongoing investments in operations, fixed assets, or other long-term assets, supporting expansion or optimization strategies. The marginal drop in 2024 may reflect asset disposals or adjustments but does not significantly reverse the growth trend.
In summary, the company's financial structure demonstrates evolving leverage with a notable peak in debt in 2022, followed by partial reduction. Simultaneously, a transition from equity deficit to a positive and growing equity base indicates improving solvency and capital adequacy. Continuous increases in invested capital highlight sustained investment activity, supporting business growth and operational capacity enhancement.
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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 | × | 23.36% | = | 22.21% | ||
| 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 | 22.33% | ||||||||||
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 | × | 23.36% | = | 22.09% | ||
| 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 | 22.22% | ||||||||||
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 | × | 23.36% | = | 21.72% | ||
| 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 | 21.88% | ||||||||||
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 | × | 23.36% | = | 22.46% | ||
| 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 | 22.56% | ||||||||||
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 | × | 23.36% | = | 21.61% | ||
| 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 | 21.81% | ||||||||||
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 | × | 23.36% | = | 22.10% | ||
| 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 | 22.25% | ||||||||||
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 | (1,142) | (236) | (525) | (459) | (11) | (940) | |
| Invested capital2 | 7,325) | 7,372) | 6,835) | 5,723) | 5,535) | 4,412) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -15.60% | -3.20% | -7.69% | -8.02% | -0.19% | -21.32% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Accenture PLC | 0.17% | 0.95% | 3.83% | 5.64% | 6.25% | — | |
| Adobe Inc. | 0.73% | 0.90% | 6.40% | 8.78% | 1.06% | — | |
| AppLovin Corp. | 0.47% | -20.65% | -26.83% | -30.22% | — | — | |
| Cadence Design Systems Inc. | -2.94% | 7.11% | 6.52% | 6.73% | — | — | |
| CrowdStrike Holdings Inc. | -8.47% | -4.73% | -8.02% | -10.28% | — | — | |
| Datadog Inc. | -9.62% | -6.15% | -11.90% | -4.08% | — | — | |
| International Business Machines Corp. | -7.62% | -3.57% | -11.32% | -6.18% | — | — | |
| Intuit Inc. | -8.98% | -11.02% | -9.87% | -2.34% | 1.11% | — | |
| Microsoft Corp. | 7.88% | 10.93% | 18.91% | 27.95% | — | — | |
| Oracle Corp. | -7.13% | -7.96% | -7.01% | 1.19% | — | — | |
| Palantir Technologies Inc. | -12.41% | -9.13% | -32.87% | -40.33% | — | — | |
| Palo Alto Networks Inc. | 5.06% | 11.20% | 3.25% | -5.45% | -6.28% | — | |
| Salesforce Inc. | -14.38% | -17.82% | -14.70% | -12.56% | — | — | |
| ServiceNow Inc. | 5.88% | 5.18% | 0.67% | 1.89% | — | — | |
| Synopsys Inc. | -8.24% | -7.54% | -0.94% | -6.97% | -6.77% | — | |
| Workday Inc. | -13.13% | -19.36% | -14.19% | -19.44% | — | — | |
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 × -1,142 ÷ 7,325 = -15.60%
4 Click competitor name to see calculations.
The financial performance between fiscal years 2019 and 2024 is characterized by a consistent negative economic profit, signifying that the company failed to generate returns exceeding its cost of capital throughout the analyzed period.
- Economic Profit Trends
- Economic profit remained negative for six consecutive years. A notable improvement occurred in 2020, where the deficit narrowed to 11 million USD, approaching a breakeven point. However, this trend was not sustained, with losses widening again in subsequent years and reaching a peak deficit of 1,142 million USD in 2024.
- Invested Capital Expansion
- A steady increase in invested capital is observed from 2019 through 2023, rising from 4,412 million USD to 7,372 million USD. This indicates a significant expansion of the capital base over five years, followed by a marginal contraction to 7,325 million USD in 2024.
- Economic Spread Ratio Analysis
- The economic spread ratio remained in negative territory across the entire duration, reflecting a persistent shortfall in value creation. The ratio improved from -21.32% in 2019 to a high of -3.20% in 2023, suggesting a narrowing gap between the return on capital and the cost of capital. This recovery was abruptly reversed in 2024, with the ratio dropping to -15.60%.
The divergence between the growth in invested capital and the volatility of economic profit suggests that capital injections have not yet yielded a positive economic spread. The sharp deterioration in both the spread ratio and economic profit in 2024 indicates a significant increase in the cost of capital or a decrease in the efficiency of the assets employed relative to the capital invested.
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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 | (1,142) | (236) | (525) | (459) | (11) | (940) | |
| 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 | -22.05% | -4.07% | -10.91% | -11.07% | -0.25% | -34.75% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Accenture PLC | 0.10% | 0.49% | 1.84% | 2.89% | 3.18% | — | |
| Adobe Inc. | 0.83% | 1.13% | 7.45% | 10.94% | 1.52% | — | |
| AppLovin Corp. | 0.46% | -28.27% | -50.24% | -60.51% | — | — | |
| Cadence Design Systems Inc. | -4.51% | 7.08% | 6.50% | 6.84% | — | — | |
| CrowdStrike Holdings Inc. | -13.28% | -6.35% | -12.56% | -21.36% | — | — | |
| Datadog Inc. | -8.73% | -3.84% | -8.23% | -3.24% | — | — | |
| International Business Machines Corp. | -13.47% | -6.36% | -19.60% | -11.75% | — | — | |
| Intuit Inc. | -13.81% | -18.05% | -18.99% | -2.97% | 1.25% | — | |
| Microsoft Corp. | 11.02% | 12.45% | 18.12% | 23.20% | — | — | |
| Oracle Corp. | -13.56% | -15.40% | -12.87% | 2.35% | — | — | |
| Palantir Technologies Inc. | -10.76% | -4.90% | -55.15% | -66.43% | — | — | |
| Palo Alto Networks Inc. | 5.38% | 11.12% | 3.78% | -7.33% | -10.20% | — | |
| Salesforce Inc. | -33.24% | -45.06% | -40.81% | -28.80% | — | — | |
| ServiceNow Inc. | 4.84% | 4.17% | 0.54% | 1.63% | — | — | |
| Synopsys Inc. | -13.81% | -10.64% | -1.33% | -11.09% | -11.63% | — | |
| Workday Inc. | -14.62% | -23.74% | -19.23% | -25.36% | — | — | |
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 × -1,142 ÷ 5,181 = -22.05%
3 Click competitor name to see calculations.
The analysis of economic value added reveals a consistent inability to generate positive economic profit from 2019 through 2024. Despite substantial growth in adjusted net revenue for the majority of the period, the economic profit margin remained negative, indicating that the return on invested capital failed to exceed the company's cost of capital across all observed years.
- Economic Profit Volatility
- Economic profit remained negative throughout the six-year window and was characterized by significant volatility. A notable recovery occurred in 2020, when losses narrowed to US$ 11 million, marking the closest the company came to achieving economic break-even. However, this progress was not sustained, and the period concluded with a sharp decline in 2024, reaching a peak deficit of US$ 1,142 million.
- Adjusted Net Revenue Trends
- A general upward trajectory in adjusted net revenue was observed from 2019 to 2023, increasing from US$ 2,706 million to a high of US$ 5,795 million. This growth trend was interrupted in 2024, as revenue contracted to US$ 5,181 million, coinciding with the most significant drop in economic profit.
- Economic Profit Margin Dynamics
- The economic profit margin exhibited wide fluctuations, reflecting the instability of value creation relative to scale. After a severe margin of -34.75% in 2019, the ratio improved dramatically to -0.25% in 2020. The margin subsequently stabilized between -10.91% and -11.07% during 2021 and 2022, before improving to -4.07% in 2023. The 2024 fiscal year saw a significant deterioration, with the margin falling to -22.05%, suggesting a decoupling of revenue performance and economic value generation.
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