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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

Dollar Tree Inc., economic profit calculation

US$ in thousands

12 months ended:	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Net operating profit after taxes (NOPAT)¹	1,622,053)	1,686,673)	1,176,670)	(1,112,626)	1,636,265)	1,187,252)
Cost of capital²	9.67%	9.28%	8.65%	9.17%	8.75%	8.07%
Invested capital³	18,201,900)	17,693,200)	16,987,300)	17,010,987)	19,846,068)	19,165,878)

Economic profit⁴	(138,381)	44,393)	(292,708)	(2,671,765)	(100,648)	(359,432)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

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
= 1,622,053 – 9.67% × 18,201,900 = -138,381

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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.	Dollar Tree Inc. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

Dollar Tree Inc., NOPAT calculation

US$ in thousands

12 months ended:	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Net income (loss)	1,327,900)	1,341,900)	827,000)	(1,590,800)	1,714,300)	896,200)
Deferred income tax expense (benefit)¹	(23,200)	30,800)	9,000)	(12,000)	(473,700)	(127,600)
Increase (decrease) in equity equivalents²	(23,200)	30,800)	9,000)	(12,000)	(473,700)	(127,600)
Interest expense, net	178,900)	147,300)	162,100)	370,000)	301,800)	375,500)
Interest expense, operating lease liability³	222,812)	250,134)	269,128)	250,473)	294,980)	268,579)
Adjusted interest expense, net	401,712)	397,434)	431,228)	620,473)	596,780)	644,079)
Tax benefit of interest expense, net⁴	(84,360)	(83,461)	(90,558)	(130,299)	(201,115)	(225,428)
Adjusted interest expense, net, after taxes⁵	317,353)	313,973)	340,670)	490,174)	395,665)	418,652)
Net operating profit after taxes (NOPAT)	1,622,053)	1,686,673)	1,176,670)	(1,112,626)	1,636,265)	1,187,252)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in equity equivalents to net income (loss).

³ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 6,553,300 × 3.40% = 222,812

⁴ 2022 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 401,712 × 21.00% = 84,360

⁵ Addition of after taxes interest expense to net income (loss).

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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.	Dollar Tree Inc. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Dollar Tree Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Provision for income taxes	304,300)	397,900)	271,700)	281,800)	(10,300)	433,200)
Less: Deferred income tax expense (benefit)	(23,200)	30,800)	9,000)	(12,000)	(473,700)	(127,600)
Add: Tax savings from interest expense, net	84,360)	83,461)	90,558)	130,299)	201,115)	225,428)
Cash operating taxes	411,860)	450,561)	353,258)	424,099)	664,515)	786,228)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

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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.	Dollar Tree Inc. cash operating taxes increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Dollar Tree Inc., invested capital calculation (financing approach)

US$ in thousands

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Current portion of long-term debt	—)	—)	250,000)	—)	915,900)	152,100)
Long-term debt, net, excluding current portion	3,417,000)	3,226,200)	3,522,200)	4,265,300)	4,762,100)	6,169,700)
Operating lease liability¹	6,553,300)	6,413,700)	6,258,800)	6,325,087)	6,197,068)	6,104,078)
Total reported debt & leases	9,970,300)	9,639,900)	10,031,000)	10,590,387)	11,875,068)	12,425,878)
Shareholders’ equity	7,718,500)	7,285,300)	6,254,800)	5,642,900)	7,182,300)	5,389,500)
Net deferred tax (assets) liabilities²	966,900)	990,300)	960,300)	973,200)	985,200)	1,458,900)
Equity equivalents³	966,900)	990,300)	960,300)	973,200)	985,200)	1,458,900)
Accumulated other comprehensive (income) loss, net of tax⁴	35,200)	35,200)	39,800)	38,300)	32,300)	37,600)
Adjusted shareholders’ equity	8,720,600)	8,310,800)	7,254,900)	6,654,400)	8,199,800)	6,886,000)
Construction in progress⁵	(489,000)	(257,500)	(298,600)	(233,800)	(228,800)	(146,000)
Invested capital	18,201,900)	17,693,200)	16,987,300)	17,010,987)	19,846,068)	19,165,878)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of equity equivalents to shareholders’ equity.

⁴ Removal of accumulated other comprehensive income.

⁵ 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.	Dollar Tree Inc. invested capital increased from 2020 to 2021 and from 2021 to 2022.

Dollar Tree Inc., cost of capital calculations

Jan 29, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	34,005,166)	34,005,166)	÷	44,123,366)	=	0.77	0.77	×	11.73%	=	9.04%
Long-term debt³	3,564,900)	3,564,900)	÷	44,123,366)	=	0.08	0.08	×	3.68% × (1 – 21.00%)	=	0.23%
Operating lease liability⁴	6,553,300)	6,553,300)	÷	44,123,366)	=	0.15	0.15	×	3.40% × (1 – 21.00%)	=	0.40%
Total:	44,123,366)					1.00					9.67%

Based on: 10-K (reporting date: 2022-01-29).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt. See details »

⁴ Operating lease liability. See details »

Jan 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	25,452,218)	25,452,218)	÷	35,525,618)	=	0.72	0.72	×	11.73%	=	8.40%
Long-term debt³	3,659,700)	3,659,700)	÷	35,525,618)	=	0.10	0.10	×	3.98% × (1 – 21.00%)	=	0.32%
Operating lease liability⁴	6,413,700)	6,413,700)	÷	35,525,618)	=	0.18	0.18	×	3.90% × (1 – 21.00%)	=	0.56%
Total:	35,525,618)					1.00					9.28%

Based on: 10-K (reporting date: 2021-01-30).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt. See details »

⁴ Operating lease liability. See details »

Feb 1, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,990,520)	17,990,520)	÷	28,321,520)	=	0.64	0.64	×	11.73%	=	7.45%
Long-term debt³	4,072,200)	4,072,200)	÷	28,321,520)	=	0.14	0.14	×	3.96% × (1 – 21.00%)	=	0.45%
Operating lease liability⁴	6,258,800)	6,258,800)	÷	28,321,520)	=	0.22	0.22	×	4.30% × (1 – 21.00%)	=	0.75%
Total:	28,321,520)					1.00					8.65%

Based on: 10-K (reporting date: 2020-02-01).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt. See details »

⁴ Operating lease liability. See details »

Feb 2, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	24,825,657)	24,825,657)	÷	35,359,544)	=	0.70	0.70	×	11.73%	=	8.23%
Long-term debt³	4,208,800)	4,208,800)	÷	35,359,544)	=	0.12	0.12	×	3.96% × (1 – 21.00%)	=	0.37%
Operating lease liability⁴	6,325,087)	6,325,087)	÷	35,359,544)	=	0.18	0.18	×	3.96% × (1 – 21.00%)	=	0.56%
Total:	35,359,544)					1.00					9.17%

Based on: 10-K (reporting date: 2019-02-02).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt. See details »

⁴ Operating lease liability. See details »

Feb 3, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	22,724,922)	22,724,922)	÷	34,806,790)	=	0.65	0.65	×	11.73%	=	7.66%
Long-term debt³	5,884,800)	5,884,800)	÷	34,806,790)	=	0.17	0.17	×	4.76% × (1 – 33.70%)	=	0.53%
Operating lease liability⁴	6,197,068)	6,197,068)	÷	34,806,790)	=	0.18	0.18	×	4.76% × (1 – 33.70%)	=	0.56%
Total:	34,806,790)					1.00					8.75%

Based on: 10-K (reporting date: 2018-02-03).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt. See details »

⁴ Operating lease liability. See details »

Jan 28, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	18,088,607)	18,088,607)	÷	30,785,785)	=	0.59	0.59	×	11.73%	=	6.89%
Long-term debt³	6,593,100)	6,593,100)	÷	30,785,785)	=	0.21	0.21	×	4.40% × (1 – 35.00%)	=	0.61%
Operating lease liability⁴	6,104,078)	6,104,078)	÷	30,785,785)	=	0.20	0.20	×	4.40% × (1 – 35.00%)	=	0.57%
Total:	30,785,785)					1.00					8.07%

Based on: 10-K (reporting date: 2017-01-28).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt. See details »

⁴ Operating lease liability. See details »

Dollar Tree Inc., economic spread ratio calculation, comparison to benchmarks

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(138,381)	44,393)	(292,708)	(2,671,765)	(100,648)	(359,432)
Invested capital²	18,201,900)	17,693,200)	16,987,300)	17,010,987)	19,846,068)	19,165,878)
Performance Ratio
Economic spread ratio³	-0.76%	0.25%	-1.72%	-15.71%	-0.51%	-1.88%
Benchmarks
Economic Spread Ratio, Competitors⁴
Costco Wholesale Corp.	9.00%	7.38%	3.57%	5.47%	5.18%	—
Target Corp.	13.48%	3.95%	2.48%	2.66%	—	—
Walmart Inc.	1.85%	3.22%	3.26%	-2.01%	—	—

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -138,381 ÷ 18,201,900 = -0.76%

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.	Dollar Tree Inc. economic spread ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Dollar Tree Inc., economic profit margin calculation, comparison to benchmarks

	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019	Feb 3, 2018	Jan 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(138,381)	44,393)	(292,708)	(2,671,765)	(100,648)	(359,432)
Net sales	26,309,800)	25,508,400)	23,610,800)	22,823,300)	22,245,500)	20,719,200)
Performance Ratio
Economic profit margin²	-0.53%	0.17%	-1.24%	-11.71%	-0.45%	-1.73%
Benchmarks
Economic Profit Margin, Competitors³
Costco Wholesale Corp.	1.28%	1.09%	0.64%	0.88%	0.78%	—
Target Corp.	3.89%	1.30%	0.88%	0.93%	—	—
Walmart Inc.	0.51%	0.95%	1.05%	-0.63%	—	—

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -138,381 ÷ 26,309,800 = -0.53%

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.	Dollar Tree Inc. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022.

Dollar Tree Inc. (NASDAQ:DLTR)

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