Accenture PLC (NYSE:ACN)

Over the observed period, net operating profit after taxes (NOPAT) generally increased, although with some fluctuation. Invested capital consistently rose, while the cost of capital remained relatively stable before decreasing slightly in the final year. Consequently, economic profit exhibited a more complex pattern, initially increasing then declining before a partial recovery.

NOPAT Trend

NOPAT increased from US$6,009,567 thousand in 2020 to US$6,771,649 thousand in 2021, representing a growth of approximately 12.7%. Further growth was observed in 2022, reaching US$7,128,082 thousand. A slight decrease occurred in 2023 to US$7,011,593 thousand, followed by increases in both 2024 (US$7,515,553 thousand) and 2025 (US$9,111,886 thousand), the latter representing a substantial increase.

Cost of Capital

The cost of capital remained relatively consistent between 2020 and 2024, fluctuating between 16.98% and 17.08%. A decrease to 16.59% was observed in 2025.

Invested Capital Trend

Invested capital demonstrated a consistent upward trend throughout the period. It increased from US$22,846,720 thousand in 2020 to US$45,311,761 thousand in 2025, indicating significant capital deployment over the five-year period.

Economic Profit Analysis

Economic profit peaked in 2021 at US$2,292,657 thousand. While remaining positive throughout the period, it decreased to US$2,058,979 thousand in 2022 and further to US$1,344,965 thousand in 2023. A slight recovery was seen in 2024 (US$1,207,480 thousand), followed by a more pronounced increase to US$1,596,807 thousand in 2025. The decline in economic profit from 2021 to 2023, despite increasing NOPAT, suggests that the growth in invested capital outpaced the growth in operating profits, and the relatively stable cost of capital contributed to this effect. The 2025 increase suggests a more favorable balance between profit generation and capital employed.

Net Income Attributable to Accenture plc

The net income shows a consistent upward trend over the observed periods. Starting at approximately 5.11 billion USD in 2020, it increased each year, reaching about 7.68 billion USD by 2025. This demonstrates steady profit growth with particularly notable increments between 2021 and 2022, and a sustained increase thereafter, suggesting effective management and operational performance.

Net Operating Profit After Taxes (NOPAT)

NOPAT also exhibits a general positive trend, increasing from about 6.01 billion USD in 2020 to over 9.11 billion USD in 2025. The growth, while mostly steady, includes some fluctuations, such as a slight dip in 2023 compared to 2022. Despite this, the overall pattern points to improved operational efficiency and profitability before dividends and other financial considerations.

General Observations

Both net income and NOPAT have increased significantly over the six-year span. The growth in NOPAT outpaces net income in later years, especially from 2023 to 2025, indicating that the company is generating a higher operating profit relative to its net income. This divergence might highlight changes in non-operating factors, taxes, or other income statement elements affecting net income.

The financial data reveals trends in tax-related expenses and cash operating taxes over a six-year period.

Income Tax Expense

The income tax expense shows an overall upward trajectory from 1,589,018 thousand US dollars in 2020 to an estimated 2,437,993 thousand US dollars in 2025. Notably, there was a significant increase in 2022, rising from approximately 1.77 million to 2.21 million thousand US dollars. After a slight decline in 2023, the expense resumes increasing in the subsequent years. This pattern suggests growth in taxable income or adjustments in tax rates impacting the company's tax obligations.

Cash Operating Taxes

Cash operating taxes also demonstrate a growth trend from 1,440,649 thousand US dollars in 2020 to a peak of about 2,446,374 thousand US dollars in 2022. However, unlike income tax expense, cash operating taxes decrease starting in 2023 and continue to decline through 2025, falling to around 2,085,412 thousand US dollars. This divergence may reflect changes in tax payment timing, tax planning strategies, or fluctuations in operating profitability affecting cash tax payments.

Overall, the data indicates increasing tax expenses with a more volatile pattern in cash operating taxes, which could be indicative of evolving tax liabilities versus actual cash payments, potentially influenced by corporate strategies or external economic factors.

Total Reported Debt & Leases

The total reported debt and leases demonstrated a fluctuating trend over the observed periods. Initially, there was a slight increase from 3,485,513 thousand USD in 2020 to 3,506,634 thousand USD in 2021, followed by a gradual decline in the subsequent years to 3,149,034 thousand USD by 2023. However, a significant increase occurred thereafter, with debt rising sharply to 4,120,549 thousand USD in 2024 and nearly doubling to 8,182,866 thousand USD in 2025. This suggests increased leverage or financing activities particularly in the last two years of the analysis period.

Total Accenture plc Shareholders’ Equity

Shareholders’ equity consistently increased throughout the entire timeframe. The equity value grew steadily from 17,000,536 thousand USD in 2020 to 19,529,454 thousand USD in 2021 and continued this upward trajectory each year, reaching 31,195,446 thousand USD in 2025. This consistent rise indicates a strengthening capital base and potentially retained earnings or equity issuances contributing to shareholder value over time.

Invested Capital

Invested capital showed a clear and sustained upward trend across the periods examined. Starting at 22,846,720 thousand USD in 2020, it increased steadily each year, culminating at 45,311,761 thousand USD in 2025. The growth in invested capital outpaced the growth in shareholders’ equity, reflecting expansion or reinvestment in operational assets, possibly funded by the increased debt observed towards the end of the period.

The economic spread ratio demonstrates a consistent decline over the observed period, although a slight recovery is noted in the final year. Economic profit fluctuates, while invested capital consistently increases, driving the observed trend in the economic spread ratio.

Economic Spread Ratio

The economic spread ratio decreased from 9.32% in 2020 to 3.27% in 2023, indicating a diminishing ability to generate returns exceeding the cost of capital. A modest increase to 3.52% is observed in 2025, but remains significantly lower than the initial value. This suggests a potential erosion of competitive advantage or increasing capital intensity.

Economic profit peaked in 2021 at US$2,292,657 thousand before declining to US$1,344,965 thousand in 2023. While economic profit shows a recovery in 2025 to US$1,596,807 thousand, it does not reach the levels seen in the earlier years. This suggests that while profitability is improving, it is not improving at the same rate as capital employed.

Invested Capital

Invested capital exhibits a steady and substantial increase throughout the period, rising from US$22,846,720 thousand in 2020 to US$45,311,761 thousand in 2025. This consistent growth in capital employed, coupled with the fluctuations and ultimate decline in the economic spread ratio, indicates that the company is deploying more capital to generate returns, but with decreasing efficiency.

The combination of increasing invested capital and a declining economic spread ratio suggests that the company may be facing challenges in effectively allocating capital or that the returns on new investments are lower than those on existing assets. The slight recovery in the economic spread ratio in 2025, alongside continued growth in economic profit, may indicate a stabilization of these trends, but further monitoring is warranted.

The economic profit margin demonstrates a declining trend over the observed period, followed by a modest recovery in the most recent year. While economic profit initially increased, the rate of growth slowed and then reversed, impacting the margin.

Economic Profit Margin Trend

The economic profit margin began at 4.74% in 2020 and decreased to 4.48% in 2021. This decline continued, with the margin falling to 3.33% in 2022 and further to 2.09% in 2023. A slight increase to 1.85% was noted in 2024, representing the lowest point in the series. The most recent year, 2025, shows a recovery to 2.26%, though it remains below the initial value.

Economic profit itself exhibited an initial increase from 2,129,760 to 2,292,657 between 2020 and 2021. However, it subsequently decreased to 2,058,979 in 2022 and 1,344,965 in 2023. A further reduction to 1,207,480 occurred in 2024 before a partial recovery to 1,596,807 in 2025. This pattern in economic profit directly influences the observed trend in the economic profit margin.

Revenue Growth vs. Profit Margin

Adjusted revenues consistently increased throughout the period, rising from 44,900,652 to 70,572,494. Despite this revenue growth, the economic profit margin decreased, indicating that revenue increases were not translating into proportional increases in economic profit. The margin’s stabilization and slight increase in the final year suggest a potential improvement in profitability relative to revenue, but further investigation is warranted.

The divergence between revenue growth and economic profit margin suggests potential issues with cost management, pricing strategies, or capital efficiency. The recent recovery in the margin, coupled with continued revenue growth, may indicate that corrective actions are beginning to have a positive effect, but the margin remains significantly lower than its initial level.