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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
Based on: 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), 10-K (reporting date: 2018-06-30).
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
= 627,683 – 15.78% × 2,437,425 = 243,091
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. | Super Micro Computer Inc. economic profit increased from 2021 to 2022 and from 2022 to 2023. |
Net Operating Profit after Taxes (NOPAT)
Based on: 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), 10-K (reporting date: 2018-06-30).
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 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 19,160 × 3.10% = 594
7 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 11,085 × 21.00% = 2,328
8 Addition of after taxes interest expense to net income.
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. | Super Micro Computer Inc. NOPAT increased from 2021 to 2022 and from 2022 to 2023. |
Cash Operating Taxes
Based on: 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), 10-K (reporting date: 2018-06-30).
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. | Super Micro Computer Inc. cash operating taxes increased from 2021 to 2022 and from 2022 to 2023. |
Invested Capital
Based on: 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), 10-K (reporting date: 2018-06-30).
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.
Item | Description | The company |
---|---|---|
Invested capital | Capital is an approximation of the economic book value of all cash invested in going-concern business activities. | Super Micro Computer Inc. invested capital increased from 2021 to 2022 and from 2022 to 2023. |
Cost of Capital
Super Micro Computer Inc., cost of capital calculations
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 13,501,598) | 13,501,598) | ÷ | 13,811,060) | = | 0.98 | 0.98 | × | 16.14% | = | 15.78% | ||
Short-term and long-term debt3 | 290,302) | 290,302) | ÷ | 13,811,060) | = | 0.02 | 0.02 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 19,160) | 19,160) | ÷ | 13,811,060) | = | 0.00 | 0.00 | × | 3.10% × (1 – 21.00%) | = | 0.00% | ||
Total: | 13,811,060) | 1.00 | 15.78% |
Based on: 10-K (reporting date: 2023-06-30).
1 US$ in thousands
2 Equity. See details »
3 Short-term and long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 3,627,650) | 3,627,650) | ÷ | 4,248,214) | = | 0.85 | 0.85 | × | 16.14% | = | 13.78% | ||
Short-term and long-term debt3 | 596,764) | 596,764) | ÷ | 4,248,214) | = | 0.14 | 0.14 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 23,800) | 23,800) | ÷ | 4,248,214) | = | 0.01 | 0.01 | × | 3.00% × (1 – 21.00%) | = | 0.01% | ||
Total: | 4,248,214) | 1.00 | 13.79% |
Based on: 10-K (reporting date: 2022-06-30).
1 US$ in thousands
2 Equity. See details »
3 Short-term and long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 1,806,080) | 1,806,080) | ÷ | 1,925,131) | = | 0.94 | 0.94 | × | 16.14% | = | 15.14% | ||
Short-term and long-term debt3 | 98,190) | 98,190) | ÷ | 1,925,131) | = | 0.05 | 0.05 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 20,861) | 20,861) | ÷ | 1,925,131) | = | 0.01 | 0.01 | × | 3.40% × (1 – 21.00%) | = | 0.03% | ||
Total: | 1,925,131) | 1.00 | 15.17% |
Based on: 10-K (reporting date: 2021-06-30).
1 US$ in thousands
2 Equity. See details »
3 Short-term and long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 1,436,761) | 1,436,761) | ÷ | 1,490,574) | = | 0.96 | 0.96 | × | 16.14% | = | 15.55% | ||
Short-term and long-term debt3 | 29,401) | 29,401) | ÷ | 1,490,574) | = | 0.02 | 0.02 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 24,412) | 24,412) | ÷ | 1,490,574) | = | 0.02 | 0.02 | × | 3.50% × (1 – 21.00%) | = | 0.05% | ||
Total: | 1,490,574) | 1.00 | 15.60% |
Based on: 10-K (reporting date: 2020-06-30).
1 US$ in thousands
2 Equity. See details »
3 Short-term and long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 1,136,936) | 1,136,936) | ÷ | 1,178,055) | = | 0.97 | 0.97 | × | 16.14% | = | 15.57% | ||
Short-term and long-term debt3 | 23,647) | 23,647) | ÷ | 1,178,055) | = | 0.02 | 0.02 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 17,472) | 17,472) | ÷ | 1,178,055) | = | 0.01 | 0.01 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
Total: | 1,178,055) | 1.00 | 15.57% |
Based on: 10-K (reporting date: 2019-06-30).
1 US$ in thousands
2 Equity. See details »
3 Short-term and long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 1,125,499) | 1,125,499) | ÷ | 1,257,741) | = | 0.89 | 0.89 | × | 16.14% | = | 14.44% | ||
Short-term and long-term debt3 | 116,181) | 116,181) | ÷ | 1,257,741) | = | 0.09 | 0.09 | × | 0.00% × (1 – 28.10%) | = | 0.00% | ||
Operating lease liability4 | 16,061) | 16,061) | ÷ | 1,257,741) | = | 0.01 | 0.01 | × | 0.00% × (1 – 28.10%) | = | 0.00% | ||
Total: | 1,257,741) | 1.00 | 14.44% |
Based on: 10-K (reporting date: 2018-06-30).
1 US$ in thousands
2 Equity. See details »
3 Short-term and long-term debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Economic profit1 | 243,091) | 7,512) | (91,424) | (122,956) | (55,580) | (26,716) | |
Invested capital2 | 2,437,425) | 2,222,919) | 1,282,041) | 1,239,197) | 1,150,419) | 1,108,476) | |
Performance Ratio | |||||||
Economic spread ratio3 | 9.97% | 0.34% | -7.13% | -9.92% | -4.83% | -2.41% | |
Benchmarks | |||||||
Economic Spread Ratio, Competitors4 | |||||||
Apple Inc. | 140.80% | 202.29% | 198.63% | 146.56% | 90.61% | — | |
Arista Networks Inc. | 28.27% | 23.73% | 38.72% | 21.07% | 26.57% | — | |
Cisco Systems Inc. | 9.05% | 8.92% | 8.17% | 12.37% | 6.57% | — |
Based on: 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), 10-K (reporting date: 2018-06-30).
1 Economic profit. See details »
2 Invested capital. See details »
3 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 243,091 ÷ 2,437,425 = 9.97%
4 Click competitor name to see calculations.
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. | Super Micro Computer Inc. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023. |
Economic Profit Margin
Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | Jun 30, 2018 | ||
---|---|---|---|---|---|---|---|
Selected Financial Data (US$ in thousands) | |||||||
Economic profit1 | 243,091) | 7,512) | (91,424) | (122,956) | (55,580) | (26,716) | |
Net sales | 7,123,482) | 5,196,099) | 3,557,422) | 3,339,281) | 3,500,360) | 3,360,492) | |
Add: Increase (decrease) in deferred revenue | 70,587) | 31,544) | (1,452) | 350) | 55,139) | 67,775) | |
Adjusted net sales | 7,194,069) | 5,227,643) | 3,555,970) | 3,339,631) | 3,555,499) | 3,428,267) | |
Performance Ratio | |||||||
Economic profit margin2 | 3.38% | 0.14% | -2.57% | -3.68% | -1.56% | -0.78% | |
Benchmarks | |||||||
Economic Profit Margin, Competitors3 | |||||||
Apple Inc. | 22.15% | 23.91% | 23.08% | 19.21% | 17.69% | — | |
Arista Networks Inc. | 21.39% | 16.38% | 22.74% | 16.47% | 19.54% | — | |
Cisco Systems Inc. | 9.00% | 10.01% | 9.11% | 12.90% | 6.93% | — |
Based on: 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), 10-K (reporting date: 2018-06-30).
1 Economic profit. See details »
2 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 243,091 ÷ 7,194,069 = 3.38%
3 Click competitor name to see calculations.
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. | Super Micro Computer Inc. economic profit margin improved from 2021 to 2022 and from 2022 to 2023. |