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
Starbucks Corp., economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2026 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 3,305,761 – 15.67% × 19,859,700 = 193,329
The analysis of economic profit reveals a volatile trend in value creation, characterized by a period of positive returns followed by a significant contraction in 2025 and a partial recovery in 2026. While the organization maintained a positive economic profit from 2021 through 2024, the 2025 fiscal year represents a critical downturn where the company failed to cover its cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited significant fluctuations over the observed period. After a decline in 2022, profits recovered to 4.60 billion in 2023 and remained relatively stable through 2024. However, a sharp decline occurred in 2025, with NOPAT dropping to 2.45 billion, its lowest point in the series. A recovery trend began in 2026, with figures rising back to 3.31 billion.
- Invested Capital and Cost of Capital
- The cost of capital remained relatively stable, oscillating within a narrow range between 14.73% and 15.67%. In contrast, invested capital showed a steady upward trajectory from 20.46 billion in 2022 to a peak of 24.01 billion in 2025. This trend reversed sharply in 2026, where invested capital decreased to 19.86 billion, indicating a significant reduction in the capital base.
- Economic Profit Trends
- Economic profit reached its peak in 2023 at 1.19 billion. The most notable event is the transition to a negative economic profit of -1.08 billion in 2025. This value destruction was driven by the simultaneous occurrence of the lowest recorded NOPAT and the highest level of invested capital. The return to a positive economic profit of 193.33 million in 2026 is attributed to the combined effect of recovering operating profits and a substantial reduction in the capital employed.
Overall, the data indicates that value creation is highly sensitive to the relationship between NOPAT and the capital base. The 2025 deficit underscores a period where capital expansion did not yield proportional operating returns. The 2026 results suggest a strategic correction, as the reduction in invested capital helped restore the company to a state of positive economic profit.
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Net Operating Profit after Taxes (NOPAT)
Starbucks Corp., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03).
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 2026 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 9,136,700 × 3.90% = 356,331
6 2026 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 887,631 × 21.00% = 186,403
7 Addition of after taxes interest expense to net earnings attributable to Starbucks.
8 2026 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -800 × 21.00% = -168
9 Elimination of after taxes investment income.
The financial performance over the analyzed period is characterized by significant volatility in both Net Operating Profit After Taxes (NOPAT) and net earnings, featuring a cycle of fluctuation, a sharp contraction, and a subsequent partial recovery.
- Net Operating Profit After Taxes (NOPAT) Trend Analysis
- NOPAT exhibited an inconsistent trajectory, starting at 4,625,159 thousand US$ in 2021 and declining to 3,732,356 thousand US$ in 2022. A recovery occurred in 2023, with NOPAT rising to 4,602,842 thousand US$, followed by a slight moderation to 4,408,732 thousand US$ in 2024. A substantial contraction is observed in 2025, where NOPAT fell to its lowest point of 2,453,553 thousand US$, before trending upward again to 3,305,761 thousand US$ in 2026.
- Relationship Between NOPAT and Net Earnings
- A strong positive correlation exists between NOPAT and net earnings attributable to the company, as both metrics mirrored each other's movements across the entire timeframe. NOPAT consistently remained higher than net earnings, suggesting that operating profitability was consistently reduced by non-operating expenses, such as interest or taxes not captured in the NOPAT calculation, to arrive at the final net earnings.
- Profitability Volatility and Recovery
- The most significant disruption in earnings occurred between 2024 and 2025, during which net earnings decreased by approximately 50.6% and NOPAT decreased by approximately 44.3%. The subsequent increase in 2026 indicates a period of stabilization, although neither metric returned to the peak levels seen during the 2021-2023 interval.
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Cash Operating Taxes
Starbucks Corp., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03).
An analysis of the tax figures reveals a period of significant volatility, characterized by fluctuating cash outflows and accrual-based expenses. The movement of cash operating taxes generally correlates with the trend of income tax expense, although the two metrics deviate in magnitude and direction toward the end of the analyzed period.
- Trends in Cash Operating Taxes
- Cash operating taxes exhibited a fluctuating trajectory, peaking in 2023 at 1,512,061 thousand US dollars. A moderate decrease followed in 2024, leading to a substantial decline in 2025, where cash taxes reached a period low of 858,305 thousand US dollars. By 2026, a recovery is observed, with cash operating taxes rising back to 1,156,671 thousand US dollars.
- Comparison of Accrual Expense and Cash Outflows
- For the majority of the observed timeframe, cash operating taxes remained higher than the reported income tax expense. This gap was most pronounced in 2023, where cash taxes exceeded the expense by approximately 234,861 thousand US dollars. However, a reversal of this pattern occurs in 2026, as income tax expense rises to 1,315,000 thousand US dollars, surpassing the cash operating taxes of 1,156,671 thousand US dollars.
- Volatility and Convergence
- A synchronized sharp contraction is evident in 2025, where both income tax expense and cash operating taxes dropped to their lowest levels in the series. The subsequent divergence in 2026 suggests a shift in the timing of tax payments relative to the recognition of tax expenses, indicating a potential change in deferred tax positions or effective tax rate applications.
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Invested Capital
Starbucks Corp., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03).
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’ deficit.
6 Removal of accumulated other comprehensive income.
7 Subtraction of work in progress.
8 Subtraction of marketable securities.
The trajectory of invested capital exhibits a period of volatility characterized by a mid-term expansion followed by a significant contraction. After an initial decline between 2021 and 2022, invested capital grew steadily for three consecutive years, peaking in 2025 before experiencing a sharp reduction in 2026 to its lowest point in the observed period.
- Invested Capital Trends
- Invested capital decreased from 23.68 billion US$ in 2021 to 20.46 billion US$ in 2022. A recovery phase ensued, with values rising to 22.17 billion US$ in 2023, 23.53 billion US$ in 2024, and reaching 24.01 billion US$ in 2025. This upward trend was reversed in 2026, as invested capital fell precipitously to 19.86 billion US$.
- Debt and Lease Obligations
- Total reported debt and leases showed a consistent upward trajectory from 2021 through 2025. Starting at 23.61 billion US$, obligations climbed to a peak of 26.61 billion US$ in 2025. This cumulative increase suggests a period of expanded leverage or lease commitments. However, 2026 marked a pivot, with total debt and leases dropping significantly to 22.41 billion US$, indicating a substantial deleveraging event or the expiration of major lease obligations.
- Shareholders' Deficit Analysis
- A persistent shareholders' deficit is observed throughout the entire period, indicating that liabilities exceed total assets. The deficit widened significantly from 5.32 billion US$ in 2021 to a peak of 8.71 billion US$ in 2022. While the deficit narrowed slightly between 2023 and 2024, it widened again in 2025 to 8.10 billion US$ before settling at 7.67 billion US$ in 2026. The continuity of this deficit suggests a strategic capital structure likely driven by aggressive equity returns or accumulated deficits.
The correlation between the components indicates that the fluctuations in invested capital were primarily driven by the movement in total debt and leases. The sharp decline in invested capital in 2026 is directly attributable to the substantial reduction in reported debt and leases, which outweighed the marginal improvement in the shareholders' deficit during the same period.
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Cost of Capital
Starbucks Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 122,287,126) | 122,287,126) | ÷ | 143,052,626) | = | 0.85 | 0.85 | × | 17.81% | = | 15.23% | ||
| Debt3 | 11,628,800) | 11,628,800) | ÷ | 143,052,626) | = | 0.08 | 0.08 | × | 3.84% × (1 – 21.00%) | = | 0.25% | ||
| Operating lease liability4 | 9,136,700) | 9,136,700) | ÷ | 143,052,626) | = | 0.06 | 0.06 | × | 3.90% × (1 – 21.00%) | = | 0.20% | ||
| Total: | 143,052,626) | 1.00 | 15.67% | ||||||||||
Based on: 10-K (reporting date: 2026-09-27).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 96,403,338) | 96,403,338) | ÷ | 121,908,238) | = | 0.79 | 0.79 | × | 17.81% | = | 14.09% | ||
| Debt3 | 14,968,200) | 14,968,200) | ÷ | 121,908,238) | = | 0.12 | 0.12 | × | 3.97% × (1 – 21.00%) | = | 0.39% | ||
| Operating lease liability4 | 10,536,700) | 10,536,700) | ÷ | 121,908,238) | = | 0.09 | 0.09 | × | 3.70% × (1 – 21.00%) | = | 0.25% | ||
| Total: | 121,908,238) | 1.00 | 14.73% | ||||||||||
Based on: 10-K (reporting date: 2025-09-28).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 111,407,188) | 111,407,188) | ÷ | 136,288,588) | = | 0.82 | 0.82 | × | 17.81% | = | 14.56% | ||
| Debt3 | 14,646,700) | 14,646,700) | ÷ | 136,288,588) | = | 0.11 | 0.11 | × | 3.83% × (1 – 21.00%) | = | 0.33% | ||
| Operating lease liability4 | 10,234,700) | 10,234,700) | ÷ | 136,288,588) | = | 0.08 | 0.08 | × | 3.40% × (1 – 21.00%) | = | 0.20% | ||
| Total: | 136,288,588) | 1.00 | 15.09% | ||||||||||
Based on: 10-K (reporting date: 2024-09-29).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 120,001,419) | 120,001,419) | ÷ | 142,661,219) | = | 0.84 | 0.84 | × | 17.81% | = | 14.99% | ||
| 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 | 15.41% | ||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 112,427,010) | 112,427,010) | ÷ | 134,414,910) | = | 0.84 | 0.84 | × | 17.81% | = | 14.90% | ||
| 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 | 15.29% | ||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 129,967,096) | 129,967,096) | ÷ | 154,970,496) | = | 0.84 | 0.84 | × | 17.81% | = | 14.94% | ||
| 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 | 15.32% | ||||||||||
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 »
Economic Spread Ratio
Starbucks Corp., economic spread ratio calculation, comparison to benchmarks
| Sep 27, 2026 | Sep 28, 2025 | Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 193,329) | (1,082,574) | 858,716) | 1,186,823) | 603,875) | 995,957) | |
| Invested capital2 | 19,859,700) | 24,013,900) | 23,526,800) | 22,171,000) | 20,459,700) | 23,683,800) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 0.97% | -4.51% | 3.65% | 5.35% | 2.95% | 4.21% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Airbnb Inc. | — | 24.30% | 24.12% | 9.38% | 11.02% | -11.09% | |
| Booking Holdings Inc. | — | 24.25% | 29.11% | 14.66% | 3.80% | -13.64% | |
| Chipotle Mexican Grill Inc. | — | 9.14% | 8.60% | 7.02% | 2.82% | -1.67% | |
| DoorDash, Inc. | — | -18.94% | -26.98% | -39.42% | -53.20% | -39.71% | |
| McDonald’s Corp. | — | 9.05% | 8.56% | 8.64% | 5.84% | 8.26% | |
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03).
1 Economic profit. See details »
2 Invested capital. See details »
3 2026 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 193,329 ÷ 19,859,700 = 0.97%
4 Click competitor name to see calculations.
The analysis of economic value creation reveals a period of significant volatility in profitability and capital efficiency. While the company maintained positive economic value added for the majority of the period, a severe contraction occurred in 2025, followed by a partial recovery in 2026.
- Economic Spread Ratio Trends
- The economic spread ratio exhibited fluctuating performance, peaking at 5.35% in 2023 before experiencing a sharp decline. The ratio turned negative in 2025, reaching -4.51%, which indicates that the return on invested capital fell below the cost of capital during that period. By 2026, the ratio returned to positive territory at 0.97%, although it remained substantially lower than the levels observed between 2021 and 2024.
- Economic Profit Volatility
- Economic profit followed a similar trajectory to the spread ratio, reaching a high of 1,186,823 thousand US$ in 2023. This was followed by a steady decline and a subsequent collapse in 2025, where the company recorded an economic loss of 1,082,574 thousand US$. A return to profitability was achieved in 2026 with an economic profit of 193,329 thousand US$, representing a recovery from the previous year's deficit but a significant decrease from the 2021-2024 average.
- Invested Capital Dynamics
- Invested capital showed a general upward trend from 2022 through 2025, peaking at 24,013,900 thousand US$. This expansion of the capital base coincided with the eventual decline in the economic spread ratio. A notable correction occurred in 2026, where invested capital was reduced to 19,859,700 thousand US$, the lowest level in the analyzed period. This reduction in the capital base appears to be a contributing factor to the restoration of a positive economic spread ratio in the final year.
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Economic Profit Margin
Starbucks Corp., economic profit margin calculation, comparison to benchmarks
| Sep 27, 2026 | Sep 28, 2025 | Sep 29, 2024 | Oct 1, 2023 | Oct 2, 2022 | Oct 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 193,329) | (1,082,574) | 858,716) | 1,186,823) | 603,875) | 995,957) | |
| Net revenues | 37,910,600) | 37,184,400) | 36,176,200) | 35,975,600) | 32,250,300) | 29,060,600) | |
| Add: Increase (decrease) in stored value card liability and deferred revenue | (272,200) | (131,600) | (57,200) | (119,600) | (137,500) | 4,100) | |
| Adjusted net revenues | 37,638,400) | 37,052,800) | 36,119,000) | 35,856,000) | 32,112,800) | 29,064,700) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 0.51% | -2.92% | 2.38% | 3.31% | 1.88% | 3.43% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Airbnb Inc. | — | 11.32% | 13.10% | 5.46% | 8.75% | -10.03% | |
| Booking Holdings Inc. | — | 11.63% | 15.91% | 7.83% | 3.04% | -18.68% | |
| Chipotle Mexican Grill Inc. | — | 5.59% | 5.17% | 4.26% | 1.75% | -1.21% | |
| DoorDash, Inc. | — | -15.53% | -15.76% | -23.91% | -42.99% | -25.83% | |
| McDonald’s Corp. | — | 18.03% | 16.40% | 16.95% | 11.43% | 16.97% | |
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03).
1 Economic profit. See details »
2 2026 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × 193,329 ÷ 37,638,400 = 0.51%
3 Click competitor name to see calculations.
The financial performance over the analyzed period is characterized by a distinct divergence between consistent revenue expansion and highly volatile economic value generation. While top-line growth remained steady, the capacity to produce returns exceeding the cost of capital experienced significant fluctuations, culminating in a period of value destruction before a marginal recovery.
- Adjusted Net Revenues
- A continuous upward trajectory is observed in adjusted net revenues, which increased from US$ 29,064,700 thousand in October 2021 to US$ 37,638,400 thousand by September 2026. This steady growth indicates a consistent expansion of the scale of operations over the six-year timeframe.
- Economic Profit
- Economic profit demonstrates significant instability. After reaching a peak of US$ 1,186,823 thousand in October 2023, the value declined and eventually shifted to a substantial deficit of US$ 1,082,574 thousand in September 2025. Although the figure returned to positive territory in September 2026 at US$ 193,329 thousand, it remains well below the levels recorded between 2021 and 2024.
- Economic Profit Margin
- The economic profit margin reflects the volatility seen in absolute economic profit. The margin fluctuated within a range of 1.88% to 3.43% from 2021 through 2024. A sharp contraction occurred in September 2025, where the margin fell to -2.92%, signaling that the cost of capital exceeded the generated returns. The recovery to 0.51% in September 2026 suggests a return to positive economic value added, though the efficiency of value creation is notably lower than in the initial years of the period.
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