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.
Paying user area
Try for free
Super Micro Computer Inc. pages available for free this week:
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Assets (ROA) since 2007
- Total Asset Turnover since 2007
- Analysis of Debt
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Super Micro Computer Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Super Micro Computer Inc., economic profit calculation
US$ in thousands
| 12 months ended: | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
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
= – × =
The financial data reveals several notable trends over the analyzed periods. Net operating profit after taxes (NOPAT) exhibited significant fluctuations with an overall upward trajectory. After declining from approximately $123.6 million in mid-2019 to about $70.4 million in mid-2020, NOPAT increased steadily thereafter, reaching over $1.1 billion by mid-2024. This suggests growing operational profitability in recent years, despite initial setbacks.
The cost of capital showed moderate variability, fluctuating between roughly 16.2% and 18.5% during the period. It decreased from 18.26% in mid-2019 to a low of 16.17% in mid-2022, before rising again to 17.56% by mid-2024. This pattern may reflect changes in market risk perceptions or capital structure adjustments impacting the company’s financing costs.
Invested capital increased steadily from $1.15 billion in mid-2019 to approximately $2.44 billion in mid-2023, before experiencing a sharp rise to nearly $7.68 billion by mid-2024. This substantial increase in invested capital in the latest period could indicate major investments or acquisitions, potentially explaining part of the rise in NOPAT as well as changes in economic profit.
Economic profit figures moved within negative and positive territory, reflecting varying degrees of value creation relative to the cost of invested capital. It started at a loss of approximately $86.5 million in mid-2019, deepened the loss to around $156 million in mid-2020, and then improved towards breakeven and positive territory by mid-2023 at $176.7 million. However, by mid-2024, economic profit reverted sharply to a negative $231 million, indicating that despite high operating profits, returns did not surpass the cost of capital in the most recent period.
- Summary of Patterns
- 1. NOPAT showed an overall increasing trend with a sharp rebound after 2020.
- 2. Cost of capital fluctuated moderately but returned close to earlier levels by 2024.
- 3. Invested capital steadily increased with a significant jump in the latest year, suggesting large-scale investment activity.
- 4. Economic profit oscillated between losses and gains, ending with a marked negative value despite high NOPAT, implying challenges in generating returns above capital costs recently.
Net Operating Profit after Taxes (NOPAT)
Super Micro Computer Inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in accrued warranty costs.
5 Addition of increase (decrease) in equity equivalents to net income.
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
7 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
8 Addition of after taxes interest expense to net income.
9 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
10 Elimination of after taxes investment income.
The financial data exhibits a significant upward trend in both net income and net operating profit after taxes (NOPAT) over the five-year period.
- Net Income
- Net income increased consistently from 71,918 thousand US dollars in 2019 to 1,152,666 thousand US dollars in 2024. This represents a substantial growth trajectory, with particularly sharp increases observed from 2021 onwards. The most notable surge occurs between 2022 and 2023, where net income more than doubles, followed by continued robust growth into 2024.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT showed some fluctuation in earlier years, decreasing from 123,581 thousand US dollars in 2019 to 70,352 thousand US dollars in 2020. However, starting in 2021, there is a clear recovery and subsequent strong growth, reaching 1,116,783 thousand US dollars in 2024. The pattern of increase closely parallels that of net income, indicating improved operating efficiency and higher profitability from core operations in recent years.
Overall, the financial data suggests a period of transformation characterized by increased profitability and operational improvements, especially evident in the last three years. The upward trend indicates strengthening financial performance and potentially successful strategic initiatives driving both net income and operating profit growth.
Cash Operating Taxes
Super Micro Computer Inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
The financial data reveals considerable fluctuations in both the income tax provision and cash operating taxes over the examined periods.
- Income Tax Provision
- The income tax provision exhibits a variable trend, initially decreasing sharply from 14,884 thousand USD in 2019 to 2,922 thousand USD in 2020. It then increased moderately to 6,936 thousand USD in 2021, followed by a significant rise to 52,876 thousand USD in 2022. The upward trend continued, reaching a peak of 110,666 thousand USD in 2023, before declining to 63,294 thousand USD in 2024. Overall, despite the volatility, the income tax provision shows a substantial increase from 2019 to 2024, peaking notably in the period ending June 30, 2023.
- Cash Operating Taxes
- Cash operating taxes demonstrate a pronounced upward trend throughout the period analyzed. Starting at 33,161 thousand USD in 2019, they decreased to 17,343 thousand USD in 2020 and slightly declined again to 15,997 thousand USD in 2021. However, from 2022 onward, there is a marked escalation, with cash operating taxes rising to 61,030 thousand USD, then surging significantly to 205,704 thousand USD in 2023, and further increasing to 236,509 thousand USD in 2024. This indicates an increasing cash outflow related to operating taxes in recent years.
In summary, both income tax provision and cash operating taxes have experienced significant increases over the examined time frame, particularly from 2022 onwards. The steep rises in these tax-related expenses suggest substantial changes in taxable income, tax rates, or tax payment strategies, impacting the cash flow and financial position associated with taxation.
Invested Capital
Super Micro Computer Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
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 deferred revenue.
5 Addition of accrued warranty costs.
6 Addition of equity equivalents to total Super Micro Computer, Inc. stockholders’ equity.
7 Removal of accumulated other comprehensive income.
8 Subtraction of buildings construction in progress.
9 Subtraction of investment in marketable equity security.
- Total Reported Debt & Leases
- The total reported debt and leases exhibited a fluctuating yet overall increasing trend over the period. Starting at 41,119 thousand USD in 2019, the figure rose moderately to 53,813 thousand USD in 2020 before more than doubling to 119,051 thousand USD in 2021. A substantial spike occurred in 2022, with debt and leases reaching 620,564 thousand USD, followed by a decline to 309,462 thousand USD in 2023. However, in 2024, there was a dramatic surge to 2,209,527 thousand USD, indicating a significant increase in leverage or financing activities in the most recent year.
- Total Stockholders’ Equity
- Stockholders’ equity demonstrated consistent growth throughout the period. Beginning at 941,015 thousand USD in 2019, it increased steadily each year, reaching 1,065,540 thousand USD in 2020, 1,096,225 thousand USD in 2021, and 1,425,575 thousand USD in 2022. The upward trend accelerated in 2023 with equity amounting to 1,972,005 thousand USD, and then showed a marked rise to 5,417,206 thousand USD in 2024. This strong expansion in equity suggests substantial retained earnings or capital injections contributing to the company's net worth over time.
- Invested Capital
- The invested capital followed a gradual upward path initially, increasing from 1,150,419 thousand USD in 2019 to 1,239,197 thousand USD in 2020 and 1,282,041 thousand USD in 2021. A significant jump occurred in 2022, with invested capital reaching 2,222,919 thousand USD, followed by a further increase to 2,437,425 thousand USD in 2023. The most striking change was recorded in 2024, where invested capital more than tripled, reaching 7,676,769 thousand USD. This pronounced increase aligns with the large rise in debt and stockholders’ equity, indicating substantial capital deployment in the company’s assets or operations.
Cost of Capital
Super Micro Computer Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Lines of credit, term loans, and convertible notes3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-06-30).
1 US$ in thousands
2 Equity. See details »
3 Lines of credit, term loans, and convertible notes. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Lines of credit, term loans, and convertible notes3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-06-30).
1 US$ in thousands
2 Equity. See details »
3 Lines of credit, term loans, and convertible notes. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Lines of credit, term loans, and convertible notes3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-06-30).
1 US$ in thousands
2 Equity. See details »
3 Lines of credit, term loans, and convertible notes. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Lines of credit, term loans, and convertible notes3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-06-30).
1 US$ in thousands
2 Equity. See details »
3 Lines of credit, term loans, and convertible notes. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Lines of credit, term loans, and convertible notes3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-06-30).
1 US$ in thousands
2 Equity. See details »
3 Lines of credit, term loans, and convertible notes. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Lines of credit, term loans, and convertible notes3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2019-06-30).
1 US$ in thousands
2 Equity. See details »
3 Lines of credit, term loans, and convertible notes. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Super Micro Computer Inc., economic spread ratio calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The analysis of the annual financial data reveals notable fluctuations in economic profit, invested capital, and economic spread ratio over the six-year period.
- Economic Profit
- The economic profit exhibited a predominantly negative trend from 2019 through 2022, starting at -$86.5 million in 2019 and reaching its lowest point at approximately -$156.2 million in 2020. An improvement occurred in 2023 with a positive economic profit of $176.7 million. However, this improvement was followed by a sharp decline to -$231.0 million in 2024. This pattern indicates significant volatility in the company’s profitability relative to its invested capital during the period.
- Invested Capital
- Invested capital showed a steady increase from $1.15 billion in 2019 to $2.44 billion in 2023, demonstrating substantial growth in the asset base or capital deployment. A dramatic rise occurred in 2024, with invested capital reaching $7.68 billion, more than tripling the prior year’s amount. This notable increase suggests either large-scale investments or acquisitions during the final year under review.
- Economic Spread Ratio
- The economic spread ratio, which reflects the difference between return on invested capital and cost of capital, was negative throughout most of the period, starting at -7.52% in 2019 and worsening to -12.61% in 2020. This ratio showed gradual recovery through 2022, improving to -2.04%, before turning positive at 7.25% in 2023. However, in 2024, the ratio reverted to a negative value of -3.01%. The trend mirrors the fluctuations observed in economic profit and indicates challenges in maintaining returns above the cost of capital consistently.
In summary, the period was characterized by substantial variability in economic performance despite increasing invested capital. The spike in invested capital in the last year coincided with a considerable deterioration in economic profit and spread ratio, suggesting potential inefficiencies or increased cost burdens associated with the expanded capital base. Management may need to focus on improving capital allocation and enhancing profitability to reverse the adverse trends observed in the most recent period.
Economic Profit Margin
Super Micro Computer Inc., economic profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred revenue | |||||||
| Adjusted net sales | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Adjusted Net Sales
- Over the analyzed period, adjusted net sales demonstrate an overall upward trend with some fluctuations. Starting at approximately 3.56 billion US dollars in mid-2019, sales experienced a slight decline in 2020, followed by a recovery to a similar level in 2021. Subsequently, a significant increase occurred in 2022 and 2023, culminating in over 15 billion US dollars by mid-2024. This indicates substantial growth in revenue generation, particularly in the last two years of the period.
- Economic Profit
- Economic profit figures are notably volatile throughout the period. Initially negative at around -86.5 million US dollars in mid-2019, the loss deepened in 2020 before showing improvement in 2021 and a substantial reduction in loss by 2022. In 2023, economic profit turned positive to approximately 176.7 million US dollars, indicating improved operational efficiency or profitability. However, this positive trend reversed sharply in 2024, with economic profit plunging to around -231 million US dollars, representing a significant deterioration.
- Economic Profit Margin
- The economic profit margin mirrors the economic profit's fluctuations but on a percentage basis relative to sales. It began negative at -2.43% in 2019, worsened to -4.68% in 2020, then progressively improved through 2021 and 2022, reaching a small positive margin of 2.46% in 2023. This suggests an improving profitability ratio relative to sales. However, this improvement was not sustained, as the margin declined to -1.53% in 2024, reflecting a contraction in profitability relative to sales volume despite the sales growth observed.
- Overall Trends and Insights
- The financial data reveals a complex pattern where accelerated sales growth in recent years has not consistently translated into stable positive economic profits. While sales nearly quadrupled from 2019 to 2024, economic profit was negative for most years except for a brief positive spike in 2023. The deterioration in economic profit and margin in 2024 despite strong sales figures suggests possible increased costs, investments, or operational challenges impacting profitability. The volatility indicates underlying issues in cost management or margin sustainability requiring further investigation.