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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

Starbucks Corp., economic profit calculation

US$ in thousands

12 months ended:	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Net operating profit after taxes (NOPAT)¹	4,602,842)	3,732,356)	4,625,159)	1,475,541)	2,231,571)	12,689,054)
Cost of capital²	11.19%	11.10%	11.12%	10.75%	11.04%	11.00%
Invested capital³	22,171,000)	20,459,700)	23,683,800)	22,970,900)	20,030,637)	26,740,540)

Economic profit⁴	2,121,778)	1,461,797)	1,991,731)	(992,786)	20,214)	9,747,052)

Based on: 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

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
= 4,602,842 – 11.19% × 22,171,000 = 2,121,778

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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.	Starbucks Corp. economic profit decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Starbucks Corp., NOPAT calculation

US$ in thousands

12 months ended:	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Net earnings attributable to Starbucks	4,124,500)	3,281,600)	4,199,300)	928,300)	3,599,200)	4,518,300)
Deferred income tax expense (benefit)¹	(59,300)	23,100)	(125,000)	(28,500)	(1,448,800)	726,800)
Increase (decrease) in allowance for credit losses²	(3,400)	1,600)	(1,500)	20,400)	(1,300)	(1,800)
Increase (decrease) in stored value card liability and deferred revenue³	(119,600)	(137,500)	4,100)	41,600)	(405,200)	7,125,700)
Increase (decrease) in equity equivalents⁴	(182,300)	(112,800)	(122,400)	33,500)	(1,855,300)	7,850,700)
Interest expense	550,100)	482,900)	469,800)	437,000)	331,000)	170,300)
Interest expense, operating lease liability⁵	285,203)	227,783)	224,733)	222,763)	293,028)	250,410)
Adjusted interest expense	835,303)	710,683)	694,533)	659,763)	624,028)	420,710)
Tax benefit of interest expense⁶	(175,414)	(149,244)	(145,852)	(138,550)	(131,046)	(103,074)
Adjusted interest expense, after taxes⁷	659,889)	561,440)	548,681)	521,212)	492,982)	317,636)
(Gain) loss on marketable securities	700)	400)	(1,800)	(4,900)	(900)	3,600)
Investment income, before taxes	700)	400)	(1,800)	(4,900)	(900)	3,600)
Tax expense (benefit) of investment income⁸	(147)	(84)	378)	1,029)	189)	(882)
Investment income, after taxes⁹	553)	316)	(1,422)	(3,871)	(711)	2,718)
Net income (loss) attributable to noncontrolling interest	200)	1,800)	1,000)	(3,600)	(4,600)	(300)
Net operating profit after taxes (NOPAT)	4,602,842)	3,732,356)	4,625,159)	1,475,541)	2,231,571)	12,689,054)

Based on: 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in stored value card liability and deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net earnings attributable to Starbucks.

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 9,200,100 × 3.10% = 285,203

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 835,303 × 21.00% = 175,414

⁷ Addition of after taxes interest expense to net earnings attributable to Starbucks.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -700 × 21.00% = -147

⁹ Elimination of after taxes investment 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.	Starbucks Corp. NOPAT decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Starbucks Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Income tax expense	1,277,200)	948,500)	1,156,600)	239,700)	871,600)	1,262,000)
Less: Deferred income tax expense (benefit)	(59,300)	23,100)	(125,000)	(28,500)	(1,448,800)	726,800)
Add: Tax savings from interest expense	175,414)	149,244)	145,852)	138,550)	131,046)	103,074)
Less: Tax imposed on investment income	(147)	(84)	378)	1,029)	189)	(882)
Cash operating taxes	1,512,061)	1,074,728)	1,427,074)	405,721)	2,451,257)	639,156)

Based on: 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

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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.	Starbucks Corp. cash operating taxes decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Starbucks Corp., invested capital calculation (financing approach)

US$ in thousands

	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Current portion of long-term debt	1,818,600)	1,749,000)	998,900)	1,249,900)	—)	349,900)
Long-term debt, excluding current portion	13,547,600)	13,119,900)	13,616,900)	14,659,600)	11,167,000)	9,090,200)
Operating lease liability¹	9,200,100)	8,760,900)	8,989,300)	8,910,500)	8,799,637)	8,183,340)
Total reported debt & leases	24,566,300)	23,629,800)	23,605,100)	24,820,000)	19,966,637)	17,623,440)
Shareholders’ equity (deficit)	(7,994,800)	(8,706,600)	(5,321,200)	(7,805,100)	(6,232,200)	1,169,500)
Net deferred tax (assets) liabilities²	(1,755,200)	(1,681,100)	(1,726,300)	(1,631,800)	(1,579,400)	135,500)
Allowance for credit losses³	23,800)	27,200)	25,600)	27,100)	6,700)	8,000)
Stored value card liability and deferred revenue⁴	7,802,000)	7,921,600)	8,059,100)	8,055,000)	8,013,400)	8,418,600)
Equity equivalents⁵	6,070,600)	6,267,700)	6,358,400)	6,450,300)	6,440,700)	8,562,100)
Accumulated other comprehensive (income) loss, net of tax⁶	778,200)	463,200)	(147,200)	364,600)	503,300)	330,300)
Noncontrolling interests	7,000)	7,900)	6,700)	5,700)	1,200)	6,300)
Adjusted shareholders’ equity (deficit)	(1,139,000)	(1,967,800)	896,700)	(984,500)	713,000)	10,068,200)
Work in progress⁷	(607,500)	(558,700)	(374,100)	(377,300)	(358,500)	(501,900)
Marketable securities⁸	(648,800)	(643,600)	(443,900)	(487,300)	(290,500)	(449,200)
Invested capital	22,171,000)	20,459,700)	23,683,800)	22,970,900)	20,030,637)	26,740,540)

Based on: 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

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 stored value card liability and deferred revenue.

⁵ Addition of equity equivalents to shareholders’ equity (deficit).

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of work in progress.

⁸ Subtraction of marketable 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.	Starbucks Corp. invested capital decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Starbucks Corp., cost of capital calculations

Oct 1, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	120,001,419)	120,001,419)	÷	142,661,219)	=	0.84	0.84	×	12.80%	=	10.77%
Debt³	13,459,700)	13,459,700)	÷	142,661,219)	=	0.09	0.09	×	3.55% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	9,200,100)	9,200,100)	÷	142,661,219)	=	0.06	0.06	×	3.10% × (1 – 21.00%)	=	0.16%
Total:	142,661,219)					1.00					11.19%

Based on: 10-K (reporting date: 2023-10-01).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 2, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	112,427,010)	112,427,010)	÷	134,414,910)	=	0.84	0.84	×	12.80%	=	10.71%
Debt³	13,227,000)	13,227,000)	÷	134,414,910)	=	0.10	0.10	×	3.30% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	8,760,900)	8,760,900)	÷	134,414,910)	=	0.07	0.07	×	2.60% × (1 – 21.00%)	=	0.13%
Total:	134,414,910)					1.00					11.10%

Based on: 10-K (reporting date: 2022-10-02).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 3, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	129,967,096)	129,967,096)	÷	154,970,496)	=	0.84	0.84	×	12.80%	=	10.74%
Debt³	16,014,100)	16,014,100)	÷	154,970,496)	=	0.10	0.10	×	3.29% × (1 – 21.00%)	=	0.27%
Operating lease liability⁴	8,989,300)	8,989,300)	÷	154,970,496)	=	0.06	0.06	×	2.50% × (1 – 21.00%)	=	0.11%
Total:	154,970,496)					1.00					11.12%

Based on: 10-K (reporting date: 2021-10-03).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 27, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	109,776,161)	109,776,161)	÷	136,624,161)	=	0.80	0.80	×	12.80%	=	10.29%
Debt³	17,937,500)	17,937,500)	÷	136,624,161)	=	0.13	0.13	×	3.19% × (1 – 21.00%)	=	0.33%
Operating lease liability⁴	8,910,500)	8,910,500)	÷	136,624,161)	=	0.07	0.07	×	2.50% × (1 – 21.00%)	=	0.13%
Total:	136,624,161)					1.00					10.75%

Based on: 10-K (reporting date: 2020-09-27).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 29, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	99,452,010)	99,452,010)	÷	120,284,647)	=	0.83	0.83	×	12.80%	=	10.58%
Debt³	12,033,000)	12,033,000)	÷	120,284,647)	=	0.10	0.10	×	3.33% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	8,799,637)	8,799,637)	÷	120,284,647)	=	0.07	0.07	×	3.33% × (1 – 21.00%)	=	0.19%
Total:	120,284,647)					1.00					11.04%

Based on: 10-K (reporting date: 2019-09-29).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 30, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	84,559,296)	84,559,296)	÷	102,064,636)	=	0.83	0.83	×	12.80%	=	10.61%
Debt³	9,322,000)	9,322,000)	÷	102,064,636)	=	0.09	0.09	×	3.06% × (1 – 24.50%)	=	0.21%
Operating lease liability⁴	8,183,340)	8,183,340)	÷	102,064,636)	=	0.08	0.08	×	3.06% × (1 – 24.50%)	=	0.19%
Total:	102,064,636)					1.00					11.00%

Based on: 10-K (reporting date: 2018-09-30).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Starbucks Corp., economic spread ratio calculation, comparison to benchmarks

	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	2,121,778)	1,461,797)	1,991,731)	(992,786)	20,214)	9,747,052)
Invested capital²	22,171,000)	20,459,700)	23,683,800)	22,970,900)	20,030,637)	26,740,540)
Performance Ratio
Economic spread ratio³	9.57%	7.14%	8.41%	-4.32%	0.10%	36.45%
Benchmarks
Economic Spread Ratio, Competitors⁴
Airbnb Inc.	13.50%	14.92%	-7.34%	-113.64%	—	—
Booking Holdings Inc.	17.31%	6.40%	-11.00%	-10.70%	30.95%	—
Carnival Corp. & plc	-8.67%	-22.34%	-30.24%	-33.61%	-10.34%	-11.07%
Chipotle Mexican Grill Inc.	8.04%	4.00%	-0.68%	-2.70%	-2.48%	—
McDonald’s Corp.	8.98%	6.18%	8.59%	4.32%	8.56%	—

Based on: 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,121,778 ÷ 22,171,000 = 9.57%

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.	Starbucks Corp. economic spread ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Starbucks Corp., economic profit margin calculation, comparison to benchmarks

	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019	Sep 30, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	2,121,778)	1,461,797)	1,991,731)	(992,786)	20,214)	9,747,052)

Net revenues	35,975,600)	32,250,300)	29,060,600)	23,518,000)	26,508,600)	24,719,500)
Add: Increase (decrease) in stored value card liability and deferred revenue	(119,600)	(137,500)	4,100)	41,600)	(405,200)	7,125,700)
Adjusted net revenues	35,856,000)	32,112,800)	29,064,700)	23,559,600)	26,103,400)	31,845,200)
Performance Ratio
Economic profit margin²	5.92%	4.55%	6.85%	-4.21%	0.08%	30.61%
Benchmarks
Economic Profit Margin, Competitors³
Airbnb Inc.	7.74%	11.78%	-6.60%	-174.00%	—	—
Booking Holdings Inc.	9.25%	5.11%	-15.07%	-22.92%	22.64%	—
Carnival Corp. & plc	-15.83%	-81.04%	-737.18%	-294.48%	-19.03%	-20.57%
Chipotle Mexican Grill Inc.	4.88%	2.49%	-0.49%	-2.22%	-1.87%	—
McDonald’s Corp.	17.62%	12.10%	17.64%	10.51%	17.30%	—

Based on: 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29), 10-K (reporting date: 2018-09-30).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × 2,121,778 ÷ 35,856,000 = 5.92%

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.	Starbucks Corp. economic profit margin deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

Starbucks Corp. (NASDAQ:SBUX)

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