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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

Intuit Inc., economic profit calculation

US$ in millions

12 months ended:	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Net operating profit after taxes (NOPAT)¹	2,022)	2,300)	2,161)	1,795)	1,578)	1,297)
Cost of capital²	14.56%	14.28%	14.87%	14.54%	14.93%	14.87%
Invested capital³	23,712)	24,726)	12,248)	8,690)	4,546)	4,009)

Economic profit⁴	(1,430)	(1,230)	340)	531)	899)	701)

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 2,022 – 14.56% × 23,712 = -1,430

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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.	Intuit Inc. economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Intuit Inc., NOPAT calculation

US$ in millions

12 months ended:	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Net income	2,384)	2,066)	2,062)	1,826)	1,557)	1,211)
Deferred income tax expense (benefit)¹	(659)	99)	(43)	(100)	(28)	43)
Increase (decrease) in allowance for doubtful accounts²	(24)	(65)	84)	9)	(2)	(41)
Increase (decrease) in deferred revenue³	112)	122)	27)	42)	39)	69)
Increase (decrease) in equity equivalents⁴	(571)	156)	68)	(49)	9)	71)
Interest expense	248)	81)	29)	14)	15)	20)
Interest expense, operating lease liability⁵	17)	18)	10)	8)	—)	—)
Adjusted interest expense	265)	99)	39)	22)	15)	20)
Tax benefit of interest expense⁶	(56)	(21)	(8)	(5)	(3)	(5)
Adjusted interest expense, after taxes⁷	209)	78)	31)	18)	12)	15)
Net operating profit after taxes (NOPAT)	2,022)	2,300)	2,161)	1,795)	1,578)	1,297)

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

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 equity equivalents to net income.

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 569 × 3.00% = 17

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 265 × 21.00% = 56

⁷ 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.	Intuit Inc. NOPAT increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Intuit Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Provision for income taxes	605)	476)	494)	372)	324)	292)
Less: Deferred income tax expense (benefit)	(659)	99)	(43)	(100)	(28)	43)
Add: Tax savings from interest expense	56)	21)	8)	5)	3)	5)
Cash operating taxes	1,320)	398)	545)	477)	355)	254)

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

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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.	Intuit Inc. cash operating taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Intuit Inc., invested capital calculation (financing approach)

US$ in millions

	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Short-term debt	—)	499)	—)	1,338)	50)	50)
Long-term debt	6,120)	6,415)	2,034)	2,031)	386)	388)
Operating lease liability¹	569)	626)	446)	267)	352)	399)
Total reported debt & leases	6,689)	7,540)	2,480)	3,636)	788)	837)
Stockholders’ equity	17,269)	16,441)	9,869)	5,106)	3,749)	2,354)
Net deferred tax (assets) liabilities²	(60)	608)	517)	(63)	36)	(80)
Allowance for doubtful accounts³	7)	31)	96)	12)	3)	5)
Deferred revenue⁴	926)	814)	692)	665)	623)	1,158)
Equity equivalents⁵	873)	1,453)	1,305)	614)	662)	1,083)
Accumulated other comprehensive (income) loss, net of tax⁶	55)	60)	24)	32)	36)	35)
Adjusted stockholders’ equity	18,197)	17,954)	11,198)	5,752)	4,447)	3,472)
Capital in progress⁷	(360)	(283)	(122)	(90)	(65)	(48)
Available-for-sale debt securities⁸	(814)	(485)	(1,308)	(608)	(624)	(252)
Invested capital	23,712)	24,726)	12,248)	8,690)	4,546)	4,009)

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

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 equity equivalents to stockholders’ equity.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of capital in progress.

⁸ Subtraction of available-for-sale debt 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.	Intuit Inc. invested capital increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Intuit Inc., cost of capital calculations

Jul 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	154,031)	154,031)	÷	160,539)	=	0.96	0.96	×	15.09%	=	14.47%
Debt³	5,939)	5,939)	÷	160,539)	=	0.04	0.04	×	2.66% × (1 – 21.00%)	=	0.08%
Operating lease liability⁴	569)	569)	÷	160,539)	=	0.00	0.00	×	3.00% × (1 – 21.00%)	=	0.01%
Total:	160,539)					1.00					14.56%

Based on: 10-K (reporting date: 2023-07-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jul 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	118,402)	118,402)	÷	125,796)	=	0.94	0.94	×	15.09%	=	14.20%
Debt³	6,768)	6,768)	÷	125,796)	=	0.05	0.05	×	1.58% × (1 – 21.00%)	=	0.07%
Operating lease liability⁴	626)	626)	÷	125,796)	=	0.00	0.00	×	2.90% × (1 – 21.00%)	=	0.01%
Total:	125,796)					1.00					14.28%

Based on: 10-K (reporting date: 2022-07-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jul 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	155,004)	155,004)	÷	157,484)	=	0.98	0.98	×	15.09%	=	14.85%
Debt³	2,034)	2,034)	÷	157,484)	=	0.01	0.01	×	1.35% × (1 – 21.00%)	=	0.01%
Operating lease liability⁴	446)	446)	÷	157,484)	=	0.00	0.00	×	2.30% × (1 – 21.00%)	=	0.01%
Total:	157,484)					1.00					14.87%

Based on: 10-K (reporting date: 2021-07-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jul 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	90,426)	90,426)	÷	94,121)	=	0.96	0.96	×	15.09%	=	14.49%
Debt³	3,428)	3,428)	÷	94,121)	=	0.04	0.04	×	1.41% × (1 – 21.00%)	=	0.04%
Operating lease liability⁴	267)	267)	÷	94,121)	=	0.00	0.00	×	3.10% × (1 – 21.00%)	=	0.01%
Total:	94,121)					1.00					14.54%

Based on: 10-K (reporting date: 2020-07-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jul 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	74,995)	74,995)	÷	75,783)	=	0.99	0.99	×	15.09%	=	14.93%
Debt³	436)	436)	÷	75,783)	=	0.01	0.01	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	352)	352)	÷	75,783)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Total:	75,783)					1.00					14.93%

Based on: 10-K (reporting date: 2019-07-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jul 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	56,771)	56,771)	÷	57,608)	=	0.99	0.99	×	15.09%	=	14.87%
Debt³	438)	438)	÷	57,608)	=	0.01	0.01	×	0.00% × (1 – 26.90%)	=	0.00%
Operating lease liability⁴	399)	399)	÷	57,608)	=	0.01	0.01	×	0.00% × (1 – 26.90%)	=	0.00%
Total:	57,608)					1.00					14.87%

Based on: 10-K (reporting date: 2018-07-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

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

	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	(1,430)	(1,230)	340)	531)	899)	701)
Invested capital²	23,712)	24,726)	12,248)	8,690)	4,546)	4,009)
Performance Ratio
Economic spread ratio³	-6.03%	-4.97%	2.78%	6.11%	19.78%	17.48%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	6.03%	8.88%	10.72%	11.28%	10.01%	10.25%
Adobe Inc.	5.61%	11.04%	13.45%	5.72%	3.83%	1.48%
International Business Machines Corp.	-1.46%	-9.32%	-4.33%	-4.07%	-0.34%	—
Microsoft Corp.	16.05%	24.00%	33.01%	31.03%	26.15%	7.81%
Oracle Corp.	-1.14%	-0.85%	7.21%	1.52%	4.23%	-4.77%
Palo Alto Networks Inc.	14.94%	6.79%	-1.90%	-2.93%	0.31%	-2.51%
Salesforce Inc.	-11.95%	-9.53%	-7.21%	-10.25%	-6.24%	—
ServiceNow Inc.	8.99%	4.46%	5.67%	7.29%	6.70%	—
Synopsys Inc.	-3.55%	3.03%	-2.99%	-2.82%	-5.81%	-7.19%

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -1,430 ÷ 23,712 = -6.03%

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.	Intuit Inc. economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

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

	Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019	Jul 31, 2018
Selected Financial Data (US$ in millions)
Economic profit¹	(1,430)	(1,230)	340)	531)	899)	701)

Net revenue	14,368)	12,726)	9,633)	7,679)	6,784)	5,964)
Add: Increase (decrease) in deferred revenue	112)	122)	27)	42)	39)	69)
Adjusted net revenue	14,480)	12,848)	9,660)	7,721)	6,823)	6,033)
Performance Ratio
Economic profit margin²	-9.88%	-9.57%	3.52%	6.88%	13.18%	11.61%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	3.10%	4.28%	5.50%	5.74%	4.63%	4.30%
Adobe Inc.	7.02%	12.86%	16.77%	8.21%	5.75%	2.42%
International Business Machines Corp.	-2.61%	-16.19%	-8.27%	-7.08%	-0.58%	—
Microsoft Corp.	18.28%	23.00%	27.40%	23.04%	19.34%	5.54%
Oracle Corp.	-2.20%	-1.56%	14.26%	3.45%	7.70%	-8.61%
Palo Alto Networks Inc.	14.84%	7.91%	-2.55%	-4.76%	0.34%	-3.72%
Salesforce Inc.	-30.44%	-26.45%	-16.53%	-25.23%	-12.28%	—
ServiceNow Inc.	7.24%	3.58%	4.90%	5.95%	4.91%	—
Synopsys Inc.	-5.01%	4.26%	-4.76%	-4.84%	-10.05%	-12.27%

Based on: 10-K (reporting date: 2023-07-31), 10-K (reporting date: 2022-07-31), 10-K (reporting date: 2021-07-31), 10-K (reporting date: 2020-07-31), 10-K (reporting date: 2019-07-31), 10-K (reporting date: 2018-07-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × -1,430 ÷ 14,480 = -9.88%

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.	Intuit Inc. economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.

Intuit Inc. (NASDAQ:INTU)

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