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 – 22.22% × 7,325 = -1,134
The financial performance from 2019 to 2024 is characterized by a consistent failure to generate positive economic profit, indicating that the net operating profit after taxes has remained insufficient to cover the cost of invested capital throughout the entire period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited significant volatility over the six-year period. After a low base of 41 million US$ in 2019, profitability spiked to 1,197 million US$ in 2020. While performance fluctuated in the subsequent years, it reached a peak of 1,402 million US$ in 2023 before experiencing a sharp contraction to 493 million US$ in 2024.
- Invested Capital and Cost of Capital
- Invested capital showed a steady upward trajectory, growing from 4,412 million US$ in 2019 to a peak of 7,372 million US$ in 2023, before stabilizing at 7,325 million US$ in 2024. Concurrently, the cost of capital remained remarkably stable, fluctuating within a narrow band between 21.70% and 22.45%. This combination of increasing invested capital and a constant cost of capital resulted in a rising capital charge, increasing the threshold required to achieve positive economic profit.
- Economic Profit Trends
- Economic profit remained negative for all reported years, signaling that the company did not create economic value above its cost of capital. A notable recovery occurred in 2020, where economic profit nearly reached a breakeven point at -5 million US$. Although there was a relative improvement in 2023 with a loss of -228 million US$, the 2024 fiscal year saw a significant deterioration, with economic profit falling to its lowest point in the series at -1,134 million US$.
The widening gap between NOPAT and the cost of capital in 2024 suggests a significant decline in capital efficiency, as the operating returns dropped sharply while the capital base remained high.
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Net Operating Profit after Taxes (NOPAT)
Autodesk Inc., NOPAT calculation
US$ 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 | × | 23.24% | = | 22.10% | ||
| 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 | 22.22% | ||||||||||
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 | × | 23.24% | = | 21.98% | ||
| 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 | 22.11% | ||||||||||
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 | × | 23.24% | = | 21.61% | ||
| 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 | 21.78% | ||||||||||
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 | × | 23.24% | = | 22.35% | ||
| 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 | 22.45% | ||||||||||
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 | × | 23.24% | = | 21.50% | ||
| 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 | 21.70% | ||||||||||
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 | × | 23.24% | = | 21.99% | ||
| 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 | 22.14% | ||||||||||
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 | (1,134) | (228) | (518) | (452) | (5) | (936) | |
| Invested capital2 | 7,325) | 7,372) | 6,835) | 5,723) | 5,535) | 4,412) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -15.49% | -3.09% | -7.58% | -7.91% | -0.08% | -21.21% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Accenture PLC | 1.13% | 1.92% | 4.78% | 6.61% | — | — | |
| Adobe Inc. | 0.83% | 1.00% | 6.49% | 8.87% | 1.15% | — | |
| AppLovin Corp. | 0.70% | -20.45% | -26.69% | -30.02% | — | — | |
| Cadence Design Systems Inc. | -2.88% | 7.17% | 6.58% | 6.80% | — | — | |
| Datadog Inc. | -9.53% | -6.05% | -11.80% | -3.98% | — | — | |
| International Business Machines Corp. | -7.59% | -3.55% | -11.30% | -6.16% | — | — | |
| Intuit Inc. | -6.59% | -8.64% | -7.53% | 0.10% | — | — | |
| Microsoft Corp. | 7.48% | 10.52% | 18.51% | 27.55% | — | — | |
| Oracle Corp. | -7.89% | -8.69% | -7.67% | 0.54% | — | — | |
| Palantir Technologies Inc. | -12.27% | -8.99% | -32.73% | -40.19% | — | — | |
| Palo Alto Networks Inc. | 5.35% | 11.48% | 3.51% | -5.19% | — | — | |
| Salesforce Inc. | -14.29% | -17.73% | -14.61% | -12.46% | — | — | |
| ServiceNow Inc. | 5.94% | 5.24% | 0.73% | 1.95% | — | — | |
| Synopsys Inc. | -8.17% | -7.47% | -0.87% | -6.90% | -6.70% | — | |
| Workday Inc. | -13.04% | -19.26% | -14.09% | -19.34% | — | — | |
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 × -1,134 ÷ 7,325 = -15.49%
4 Click competitor name to see calculations.
The analysis of economic value creation reveals a consistent failure to generate positive economic profit over the six-year period ending January 31, 2024. Throughout this duration, the company operated below its cost of capital, as evidenced by a persistently negative economic spread ratio, indicating that the returns on invested capital did not sufficiently cover the cost of those funds.
- Economic Profit Analysis
- Economic profit remained negative for all reported years, exhibiting significant volatility. A period of near-breakeven was achieved on January 31, 2020, with a loss of only 5 million USD. However, this improvement was not sustained; losses widened in subsequent years, culminating in a peak deficit of 1,134 million USD by January 31, 2024. This suggests an increasing gap between the actual return on capital and the required return over the final two years of the period.
- Invested Capital Trends
- Invested capital showed a steady growth pattern from 2019 to 2023, rising from 4,412 million USD to 7,372 million USD. This represents a substantial increase in the capital base deployed to generate returns. A slight plateau occurred in the final year, with invested capital decreasing marginally to 7,325 million USD on January 31, 2024.
- Economic Spread Ratio Dynamics
- The economic spread ratio, which measures the difference between the return on invested capital and the cost of capital, remained negative throughout the period. A sharp improvement was observed between 2019 and 2020, where the ratio moved from -21.21% to -0.08%. A gradual recovery trend continued through January 31, 2023, reaching -3.09%. However, this positive trajectory reversed sharply in 2024, with the ratio falling to -15.49%, signaling a significant decline in the efficiency of capital utilization relative to the cost of funding.
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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 | (1,134) | (228) | (518) | (452) | (5) | (936) | |
| 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 | -21.90% | -3.93% | -10.76% | -10.92% | -0.11% | -34.57% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Accenture PLC | 0.64% | 0.99% | 2.30% | 3.39% | — | — | |
| Adobe Inc. | 0.94% | 1.25% | 7.56% | 11.05% | 1.65% | — | |
| AppLovin Corp. | 0.68% | -27.99% | -49.97% | -60.11% | — | — | |
| Cadence Design Systems Inc. | -4.41% | 7.14% | 6.57% | 6.90% | — | — | |
| Datadog Inc. | -8.65% | -3.79% | -8.16% | -3.16% | — | — | |
| International Business Machines Corp. | -13.42% | -6.31% | -19.56% | -11.71% | — | — | |
| Intuit Inc. | -10.13% | -14.15% | -14.49% | 0.13% | — | — | |
| Microsoft Corp. | 10.45% | 11.98% | 17.74% | 22.86% | — | — | |
| Oracle Corp. | -15.00% | -16.81% | -14.08% | 1.07% | — | — | |
| Palantir Technologies Inc. | -10.64% | -4.83% | -54.91% | -66.20% | — | — | |
| Palo Alto Networks Inc. | 5.68% | 11.39% | 4.09% | -6.98% | — | — | |
| Salesforce Inc. | -33.02% | -44.83% | -40.55% | -28.58% | — | — | |
| ServiceNow Inc. | 4.89% | 4.21% | 0.59% | 1.68% | — | — | |
| Synopsys Inc. | -13.69% | -10.54% | -1.23% | -10.97% | -11.50% | — | |
| Workday Inc. | -14.52% | -23.63% | -19.10% | -25.24% | — | — | |
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 × -1,134 ÷ 5,181 = -21.90%
3 Click competitor name to see calculations.
The financial performance from 2019 to 2024 is characterized by a persistent failure to generate positive economic profit, indicating that the returns generated have consistently remained below the company's cost of capital. Despite fluctuations in revenue and profit margins, the organization has not achieved economic value added during this six-year period.
- Economic Profit Trends
- Economic profit has remained negative throughout the analyzed timeframe. A significant recovery was observed in 2020, where losses narrowed to 5 million USD, nearly reaching a break-even point. However, this improvement was not sustained, with losses widening again in 2021 and 2022. A partial recovery occurred in 2023, but the period concluded with a substantial deterioration in 2024, reaching a peak deficit of 1,134 million USD.
- Adjusted Net Revenue Performance
- Adjusted net revenue demonstrated a general growth trend from 2019 through 2023, rising from 2,706 million USD to a peak of 5,795 million USD. This growth period suggests an expansion in scale; however, the revenue trajectory reversed in 2024, declining to 5,181 million USD. This decline in revenue coincides with the most significant increase in economic loss observed in the data set.
- Economic Profit Margin Analysis
- The economic profit margin has exhibited high volatility. The margin improved drastically from -34.57% in 2019 to -0.11% in 2020. Following this, the margin stabilized between -10.92% and -10.76% in 2021 and 2022, before improving further to -3.93% in 2023. The trend shifted sharply in 2024, with the margin dropping to -21.90%, reflecting a significant decrease in capital efficiency and a failure to convert revenue into economic value.
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