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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Accenture PLC, economic profit calculation

US$ in thousands

	12 months ended	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013
	Net operating profit after taxes (NOPAT)¹
	Cost of capital²
	Invested capital³

	Economic profit⁴

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

<>⁴ 2018 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= hidden

–

×

=

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.	Accenture PLC’s economic profit declined from 2016 to 2017 but then slightly increased from 2017 to 2018.

Accenture PLC, NOPAT calculation

US$ in thousands

	12 months ended	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013
	Net income attributable to Accenture plc
	Deferred income tax expense (benefit)¹
	Increase (decrease) in allowances recorded for client receivables and unbilled services²
	Increase (decrease) in deferred revenues³
	Increase (decrease) in reorganization liability⁴
	Increase (decrease) in equity equivalents⁵
	Interest expense
	Interest expense, operating lease liability⁶
	Adjusted interest expense
	Tax benefit of interest expense⁷
	Adjusted interest expense, after taxes⁸
	(Gain) loss on marketable securities
	Interest income
	Investment income, before taxes
	Tax expense (benefit) of investment income⁹
	Investment income, after taxes¹⁰
	Net income (loss) attributable to noncontrolling interest
	Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowances recorded for client receivables and unbilled services.

³ Addition of increase (decrease) in deferred revenues.

⁴ Addition of increase (decrease) in reorganization liability.

⁵ Addition of increase (decrease) in equity equivalents to net income attributable to Accenture plc.

⁶ 2018 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= hidden × hidden = hidden

⁷ 2018 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= hidden × 25.70% = hidden

⁸ Addition of after taxes interest expense to net income attributable to Accenture plc.

⁹ 2018 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= hidden × 25.70% = hidden

¹⁰ Elimination of after taxes investment 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.	Accenture PLC’s NOPAT declined from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Accenture PLC, cash operating taxes calculation

US$ in thousands

	12 months ended	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013
	Provision for income taxes
	Less: Deferred income tax expense (benefit)
	Add: Tax savings from interest expense
	Less: Tax imposed on investment income
	Cash operating taxes

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

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.	Accenture PLC’s cash operating taxes increased from 2016 to 2017 and from 2017 to 2018.

Accenture PLC, invested capital calculation (financing approach)

US$ in thousands

		Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013
	Current portion of long-term debt and bank borrowings
	Long-term debt, excluding current portion
	Operating lease liability¹
	Total reported debt & leases
	Total Accenture plc shareholders’ equity
	Net deferred tax (assets) liabilities²
	Allowances recorded for client receivables and unbilled services³
	Deferred revenues⁴
	Reorganization liability⁵
	Equity equivalents⁶
	Accumulated other comprehensive (income) loss, net of tax⁷
	Noncontrolling interests
	Adjusted total Accenture plc shareholders’ equity
	Short-term investments⁸
	Invested capital

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

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 reorganization liability.

⁶ Addition of equity equivalents to total Accenture plc shareholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of short-term investments.

Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Accenture PLC’s invested capital increased from 2016 to 2017 and from 2017 to 2018.

Accenture PLC, cost of capital calculations

	Weights			Cost of capital
Equity²		÷	=		×		=
Outstanding debt³		÷	=		×	× (1 – 25.70%)	=
Operating lease liability⁴		÷	=		×	× (1 – 25.70%)	=
Total capital:	Total weights:			Cost of total capital:

Based on: 10-K (filing date: 2018-10-24).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

	Weights			Cost of capital
Equity²		÷	=		×		=
Outstanding debt³		÷	=		×	× (1 – 35.00%)	=
Operating lease liability⁴		÷	=		×	× (1 – 35.00%)	=
Total capital:	Total weights:			Cost of total capital:

Based on: 10-K (filing date: 2017-10-26).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

	Weights			Cost of capital
Equity²		÷	=		×		=
Outstanding debt³		÷	=		×	× (1 – 35.00%)	=
Operating lease liability⁴		÷	=		×	× (1 – 35.00%)	=
Total capital:	Total weights:			Cost of total capital:

Based on: 10-K (filing date: 2016-10-28).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

	Weights			Cost of capital
Equity²		÷	=		×		=
Outstanding debt³		÷	=		×	× (1 – 35.00%)	=
Operating lease liability⁴		÷	=		×	× (1 – 35.00%)	=
Total capital:	Total weights:			Cost of total capital:

Based on: 10-K (filing date: 2015-10-30).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

	Weights			Cost of capital
Equity²		÷	=		×		=
Outstanding debt³		÷	=		×	× (1 – 35.00%)	=
Operating lease liability⁴		÷	=		×	× (1 – 35.00%)	=
Total capital:	Total weights:			Cost of total capital:

Based on: 10-K (filing date: 2014-10-24).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

	Weights			Cost of capital
Equity²		÷	=		×		=
Outstanding debt³		÷	=		×	× (1 – 35.00%)	=
Operating lease liability⁴		÷	=		×	× (1 – 35.00%)	=
Total capital:	Total weights:			Cost of total capital:

Based on: 10-K (filing date: 2013-10-29).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

Accenture PLC, economic spread ratio calculation

		Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013
	Selected Financial Data (US$ in thousands)
	Economic profit¹
	Invested capital²
	Performance Ratio
	Economic spread ratio³

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2018 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × hidden ÷ hidden = hidden

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.	Accenture PLC’s economic spread ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Accenture PLC, economic profit margin calculation

		Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014	Aug 31, 2013
	Selected Financial Data (US$ in thousands)
	Economic profit¹
	Revenues
	Add: Increase (decrease) in deferred revenues
	Adjusted revenues
	Performance Ratio
	Economic profit margin²

Based on: 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28), 10-K (filing date: 2015-10-30), 10-K (filing date: 2014-10-24), 10-K (filing date: 2013-10-29).

¹ Economic profit. See details »

² 2018 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × hidden ÷ hidden = hidden

Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company’s 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.	Accenture PLC’s economic profit margin deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

	Accenture PLC	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Accenture PLC (ACN)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Aug 31, 2018

Aug 31, 2017

Aug 31, 2016

Aug 31, 2015

Aug 31, 2014

Aug 31, 2013

Economic Spread Ratio

Economic Profit Margin