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
Accenture PLC, economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 9,111,886 – 19.57% × 45,311,761 = 243,561
An analysis of the financial performance between August 2020 and August 2025 reveals a significant divergence between absolute operating profitability and the creation of economic value. While operating income has grown, the aggressive expansion of the capital base has compressed the economic profit.
- Net Operating Profit After Taxes (NOPAT)
- A consistent upward trajectory is observed in NOPAT, which rose from 6.01 billion USD in 2020 to 9.11 billion USD in 2025. Aside from a marginal decrease in 2023, the trend indicates a strong growth in the company's ability to generate profits from its core operations, with a particularly sharp increase occurring in the final year of the period.
- Invested Capital
- Invested capital shows a pattern of rapid and uninterrupted growth, increasing from 22.85 billion USD in 2020 to 45.31 billion USD in 2025. The capital base nearly doubled over the analyzed timeframe, suggesting substantial investments in growth, acquisitions, or operational scaling.
- Cost of Capital
- The cost of capital remained remarkably stable for the majority of the period, hovering around 20.1% between 2020 and 2024. A slight reduction to 19.57% is noted in 2025, representing the first significant deviation from the established baseline.
- Economic Profit
- Economic profit experienced a severe downward trend from 2021 to 2024, plummeting from 1.48 billion USD to 63.78 million USD. This decline indicates that the incremental NOPAT generated was insufficient to cover the capital charge associated with the rapidly expanding invested capital base. Essentially, the cost of financing new investments grew faster than the profits those investments produced. A reversal of this trend occurred in 2025, where economic profit climbed back to 243.56 million USD, driven by a combination of accelerated NOPAT growth and a lower cost of capital.
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Net Operating Profit after Taxes (NOPAT)
Accenture PLC, NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31).
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 revenues.
4 Addition of increase (decrease) in equity equivalents to net income attributable to Accenture plc.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 3,034,213 × 4.30% = 130,471
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 359,026 × 21.00% = 75,395
7 Addition of after taxes interest expense to net income attributable to Accenture plc.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 336,324 × 21.00% = 70,628
9 Elimination of after taxes investment income.
- 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.
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Cash Operating Taxes
Accenture PLC, cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31).
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.
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Invested Capital
Accenture PLC, invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31).
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 revenues.
5 Addition of equity equivalents to total Accenture plc shareholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of short-term investments.
- 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.
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Cost of Capital
Accenture PLC, cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 149,489,115) | 149,489,115) | ÷ | 157,704,755) | = | 0.95 | 0.95 | × | 20.46% | = | 19.40% | ||
| Debt and bank borrowings3 | 5,181,427) | 5,181,427) | ÷ | 157,704,755) | = | 0.03 | 0.03 | × | 4.21% × (1 – 21.00%) | = | 0.11% | ||
| Operating lease liability4 | 3,034,213) | 3,034,213) | ÷ | 157,704,755) | = | 0.02 | 0.02 | × | 4.30% × (1 – 21.00%) | = | 0.07% | ||
| Total: | 157,704,755) | 1.00 | 19.57% | ||||||||||
Based on: 10-K (reporting date: 2025-08-31).
1 US$ in thousands
2 Equity. See details »
3 Debt and bank borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 225,727,750) | 225,727,750) | ÷ | 229,848,299) | = | 0.98 | 0.98 | × | 20.46% | = | 20.10% | ||
| Debt and bank borrowings3 | 1,024,857) | 1,024,857) | ÷ | 229,848,299) | = | 0.00 | 0.00 | × | 5.40% × (1 – 21.00%) | = | 0.02% | ||
| Operating lease liability4 | 3,095,692) | 3,095,692) | ÷ | 229,848,299) | = | 0.01 | 0.01 | × | 4.20% × (1 – 21.00%) | = | 0.04% | ||
| Total: | 229,848,299) | 1.00 | 20.16% | ||||||||||
Based on: 10-K (reporting date: 2024-08-31).
1 US$ in thousands
2 Equity. See details »
3 Debt and bank borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 191,119,074) | 191,119,074) | ÷ | 194,268,108) | = | 0.98 | 0.98 | × | 20.46% | = | 20.13% | ||
| Debt and bank borrowings3 | 147,903) | 147,903) | ÷ | 194,268,108) | = | 0.00 | 0.00 | × | 5.40% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 3,001,131) | 3,001,131) | ÷ | 194,268,108) | = | 0.02 | 0.02 | × | 3.80% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 194,268,108) | 1.00 | 20.18% | ||||||||||
Based on: 10-K (reporting date: 2023-08-31).
1 US$ in thousands
2 Equity. See details »
3 Debt and bank borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 157,689,340) | 157,689,340) | ÷ | 161,015,096) | = | 0.98 | 0.98 | × | 20.46% | = | 20.04% | ||
| Debt and bank borrowings3 | 55,068) | 55,068) | ÷ | 161,015,096) | = | 0.00 | 0.00 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 3,270,688) | 3,270,688) | ÷ | 161,015,096) | = | 0.02 | 0.02 | × | 3.70% × (1 – 21.00%) | = | 0.06% | ||
| Total: | 161,015,096) | 1.00 | 20.10% | ||||||||||
Based on: 10-K (reporting date: 2022-08-31).
1 US$ in thousands
2 Equity. See details »
3 Debt and bank borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 216,082,660) | 216,082,660) | ÷ | 219,589,294) | = | 0.98 | 0.98 | × | 20.46% | = | 20.14% | ||
| Debt and bank borrowings3 | 65,553) | 65,553) | ÷ | 219,589,294) | = | 0.00 | 0.00 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 3,441,081) | 3,441,081) | ÷ | 219,589,294) | = | 0.02 | 0.02 | × | 3.90% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 219,589,294) | 1.00 | 20.18% | ||||||||||
Based on: 10-K (reporting date: 2021-08-31).
1 US$ in thousands
2 Equity. See details »
3 Debt and bank borrowings. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 144,662,081) | 144,662,081) | ÷ | 148,147,594) | = | 0.98 | 0.98 | × | 20.46% | = | 19.98% | ||
| Debt and bank borrowings3 | 61,872) | 61,872) | ÷ | 148,147,594) | = | 0.00 | 0.00 | × | 0.00% × (1 – 21.00%) | = | 0.00% | ||
| Operating lease liability4 | 3,423,641) | 3,423,641) | ÷ | 148,147,594) | = | 0.02 | 0.02 | × | 4.20% × (1 – 21.00%) | = | 0.08% | ||
| Total: | 148,147,594) | 1.00 | 20.06% | ||||||||||
Based on: 10-K (reporting date: 2020-08-31).
1 US$ in thousands
2 Equity. See details »
3 Debt and bank borrowings. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Accenture PLC, economic spread ratio calculation, comparison to benchmarks
| Aug 31, 2025 | Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 243,561) | 63,778) | 316,708) | 1,139,688) | 1,479,843) | 1,426,874) | |
| Invested capital2 | 45,311,761) | 36,963,067) | 33,174,004) | 29,793,146) | 26,216,920) | 22,846,720) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 0.54% | 0.17% | 0.95% | 3.83% | 5.64% | 6.25% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Adobe Inc. | 13.02% | 0.73% | 0.90% | 6.40% | 8.78% | 1.06% | |
| AppLovin Corp. | 28.19% | 0.47% | -20.65% | -26.83% | -30.22% | — | |
| Cadence Design Systems Inc. | -1.35% | -2.94% | 7.11% | 6.52% | 6.73% | — | |
| CrowdStrike Holdings Inc. | -13.40% | -8.47% | -4.73% | -8.02% | -10.28% | — | |
| Datadog Inc. | -8.93% | -9.62% | -6.15% | -11.90% | -4.08% | — | |
| International Business Machines Corp. | -0.78% | -7.62% | -3.57% | -11.32% | -6.18% | — | |
| Intuit Inc. | -5.31% | -8.98% | -11.02% | -9.87% | -2.34% | 1.11% | |
| Microsoft Corp. | 6.00% | 7.88% | 10.93% | 18.91% | 27.95% | — | |
| Oracle Corp. | -7.24% | -7.13% | -7.96% | -7.01% | 1.19% | — | |
| Palantir Technologies Inc. | 41.51% | -12.41% | -9.13% | -32.87% | -40.33% | — | |
| Palo Alto Networks Inc. | -4.13% | 5.06% | 11.20% | 3.25% | -5.45% | -6.28% | |
| Salesforce Inc. | -12.57% | -14.38% | -17.82% | -14.70% | -12.56% | — | |
| ServiceNow Inc. | 2.61% | 5.88% | 5.18% | 0.67% | 1.89% | — | |
| Synopsys Inc. | -12.48% | -8.24% | -7.54% | -0.94% | -6.97% | -6.77% | |
| Workday Inc. | -11.73% | -13.13% | -19.36% | -14.19% | -19.44% | — | |
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 243,561 ÷ 45,311,761 = 0.54%
4 Click competitor name to see calculations.
A comprehensive analysis of the financial metrics from 2020 to 2025 reveals a significant divergence between the expansion of the capital base and the company's ability to generate economic profit. While invested capital has grown consistently, economic profit has experienced a severe decline, leading to a sharp compression of the economic spread ratio over the six-year period.
- Economic Profit Trends
- Economic profit peaked in 2021 at 1,479,843 thousand US$, following a strong performance in 2020. However, a sustained downward trajectory followed, with profit falling precipitously to a low of 63,778 thousand US$ by 2024. A partial recovery is observed in 2025, with the figure rising to 243,561 thousand US$, although this remains substantially below 2020 levels.
- Invested Capital Expansion
- There is a continuous and aggressive increase in invested capital throughout the analyzed period. The capital base grew from 22,846,720 thousand US$ in 2020 to 45,311,761 thousand US$ in 2025. This represents a nearly twofold increase in the total capital deployed, indicating a period of significant investment or asset accumulation.
- Economic Spread Ratio Analysis
- The economic spread ratio, which measures the excess return over the cost of capital, demonstrates a steep decline. Starting at 6.25% in 2020, the ratio fell steadily to 3.83% in 2022 and crashed to 0.17% by 2024, indicating that the company was barely generating returns above its cost of capital. While the ratio improved slightly to 0.54% in 2025, the overall trend highlights a marked reduction in value-creation efficiency.
- Correlation and Value Creation
- The data indicates a negative correlation between the scale of invested capital and the resulting economic spread. As the capital base expanded from 22.8 billion to 45.3 billion US$, the spread ratio collapsed. This suggests that the additional capital deployed has not yielded proportional increases in economic profit, resulting in diminishing returns on invested capital relative to the cost of funding.
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Economic Profit Margin
Accenture PLC, economic profit margin calculation, comparison to benchmarks
| Aug 31, 2025 | Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 243,561) | 63,778) | 316,708) | 1,139,688) | 1,479,843) | 1,426,874) | |
| Revenues | 69,672,977) | 64,896,464) | 64,111,745) | 61,594,305) | 50,533,389) | 44,327,039) | |
| Add: Increase (decrease) in deferred revenues | 899,517) | 254,908) | 370,343) | 261,506) | 601,585) | 573,613) | |
| Adjusted revenues | 70,572,494) | 65,151,372) | 64,482,088) | 61,855,811) | 51,134,974) | 44,900,652) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 0.35% | 0.10% | 0.49% | 1.84% | 2.89% | 3.18% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Adobe Inc. | 11.78% | 0.83% | 1.13% | 7.45% | 10.94% | 1.52% | |
| AppLovin Corp. | 28.97% | 0.46% | -28.27% | -50.24% | -60.51% | — | |
| Cadence Design Systems Inc. | -2.02% | -4.51% | 7.08% | 6.50% | 6.84% | — | |
| CrowdStrike Holdings Inc. | -22.05% | -13.28% | -6.35% | -12.56% | -21.36% | — | |
| Datadog Inc. | -5.30% | -8.73% | -3.84% | -8.23% | -3.24% | — | |
| International Business Machines Corp. | -1.38% | -13.47% | -6.36% | -19.60% | -11.75% | — | |
| Intuit Inc. | -6.87% | -13.81% | -18.05% | -18.99% | -2.97% | 1.25% | |
| Microsoft Corp. | 8.95% | 11.02% | 12.45% | 18.12% | 23.20% | — | |
| Oracle Corp. | -14.52% | -13.56% | -15.40% | -12.87% | 2.35% | — | |
| Palantir Technologies Inc. | 21.50% | -10.76% | -4.90% | -55.15% | -66.43% | — | |
| Palo Alto Networks Inc. | -4.90% | 5.38% | 11.12% | 3.78% | -7.33% | -10.20% | |
| Salesforce Inc. | -27.15% | -33.24% | -45.06% | -40.81% | -28.80% | — | |
| ServiceNow Inc. | 2.88% | 4.84% | 4.17% | 0.54% | 1.63% | — | |
| Synopsys Inc. | -72.84% | -13.81% | -10.64% | -1.33% | -11.09% | -11.63% | |
| Workday Inc. | -12.46% | -14.62% | -23.74% | -19.23% | -25.36% | — | |
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-08-31), 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-08-31), 10-K (reporting date: 2021-08-31), 10-K (reporting date: 2020-08-31).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 243,561 ÷ 70,572,494 = 0.35%
3 Click competitor name to see calculations.
A significant divergence is observed between the growth of adjusted revenues and the generation of economic profit over the analyzed six-year period. While adjusted revenues expanded consistently, the company's ability to generate value above its cost of capital experienced a severe contraction, peaking in 2021 before declining sharply toward 2024, followed by a marginal recovery in 2025.
- Adjusted Revenue Growth
- A sustained upward trajectory in adjusted revenues is evident, increasing from 44,900,652 thousand USD in 2020 to 70,572,494 thousand USD by 2025. This represents steady growth in the top line, indicating successful market expansion or increased service demand over the period.
- Economic Profit Trends
- Economic profit exhibited a volatile and generally downward trend. After a slight peak of 1,479,843 thousand USD in 2021, values declined precipitously, reaching a nadir of 63,778 thousand USD in 2024. Although a recovery to 243,561 thousand USD occurred in 2025, the figure remains substantially lower than the levels recorded between 2020 and 2022.
- Economic Profit Margin Compression
- The economic profit margin demonstrates a significant compressive trend, falling from 3.18% in 2020 to a low of 0.10% in 2024. This compression indicates that the cost of capital grew disproportionately relative to the operating returns, or that operating efficiencies declined despite the increase in total revenue. The slight increase to 0.35% in 2025 suggests a stabilization of value creation, although the margin remains a fraction of its 2020 level.
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