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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
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, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019	Aug 31, 2018
Net operating profit after taxes (NOPAT)¹	7,011,593)	7,128,082)	6,771,649)	6,009,567)	4,992,768)	4,379,754)
Cost of capital²	15.09%	15.03%	15.09%	15.00%	14.80%	14.73%
Invested capital³	33,174,004)	29,793,146)	26,216,920)	22,846,720)	20,110,534)	17,518,702)

Economic profit⁴	2,006,504)	2,650,415)	2,815,590)	2,581,969)	2,016,615)	1,798,905)

Based on: 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), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31).

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
= 7,011,593 – 15.09% × 33,174,004 = 2,006,504

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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 economic profit decreased from 2021 to 2022 and from 2022 to 2023.

Accenture PLC, NOPAT calculation

US$ in thousands

12 months ended:	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019	Aug 31, 2018
Net income attributable to Accenture plc	6,871,557)	6,877,169)	5,906,809)	5,107,839)	4,779,112)	4,059,907)
Deferred income tax expense (benefit)¹	(268,953)	(213,294)	60,930)	170,951)	(96,360)	94,000)
Increase (decrease) in allowance for credit losses²	557)	(6,420)	(8,071)	(5,261)	(4,375)	(24,537)
Increase (decrease) in deferred revenues³	370,343)	261,506)	601,585)	573,613)	298,253)	123,038)
Increase (decrease) in equity equivalents⁴	101,947)	41,792)	654,444)	739,303)	197,518)	192,501)
Interest expense	47,525)	47,320)	59,492)	33,071)	22,963)	19,539)
Interest expense, operating lease liability⁵	114,043)	121,015)	134,202)	143,793)	—)	—)
Adjusted interest expense	161,568)	168,335)	193,694)	176,864)	22,963)	19,539)
Tax benefit of interest expense⁶	(33,929)	(35,350)	(40,676)	(37,141)	(4,822)	(5,022)
Adjusted interest expense, after taxes⁷	127,639)	132,985)	153,018)	139,722)	18,141)	14,517)
Interest income	(280,409)	(45,133)	(33,365)	(69,331)	(87,508)	(56,337)
Investment income, before taxes	(280,409)	(45,133)	(33,365)	(69,331)	(87,508)	(56,337)
Tax expense (benefit) of investment income⁸	58,886)	9,478)	7,007)	14,560)	18,377)	14,479)
Investment income, after taxes⁹	(221,523)	(35,655)	(26,358)	(54,771)	(69,131)	(41,858)
Net income (loss) attributable to noncontrolling interest	131,973)	111,791)	83,736)	77,474)	67,129)	154,687)
Net operating profit after taxes (NOPAT)	7,011,593)	7,128,082)	6,771,649)	6,009,567)	4,992,768)	4,379,754)

Based on: 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), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31).

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 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 3,001,131 × 3.80% = 114,043

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 161,568 × 21.00% = 33,929

⁷ Addition of after taxes interest expense to net income attributable to Accenture plc.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 280,409 × 21.00% = 58,886

⁹ Elimination of after taxes investment income.

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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 NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Accenture PLC, cash operating taxes calculation

US$ in thousands

12 months ended:	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019	Aug 31, 2018
Income tax expense	2,135,802)	2,207,207)	1,770,571)	1,589,018)	1,405,556)	1,593,499)
Less: Deferred income tax expense (benefit)	(268,953)	(213,294)	60,930)	170,951)	(96,360)	94,000)
Add: Tax savings from interest expense	33,929)	35,350)	40,676)	37,141)	4,822)	5,022)
Less: Tax imposed on investment income	58,886)	9,478)	7,007)	14,560)	18,377)	14,479)
Cash operating taxes	2,379,798)	2,446,374)	1,743,310)	1,440,649)	1,488,362)	1,490,042)

Based on: 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), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31).

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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 cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Accenture PLC, invested capital calculation (financing approach)

US$ in thousands

	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019	Aug 31, 2018
Current portion of long-term debt and bank borrowings	104,810)	9,175)	12,080)	7,820)	6,411)	5,337)
Long-term debt, excluding current portion	43,093)	45,893)	53,473)	54,052)	16,247)	19,676)
Operating lease liability¹	3,001,131)	3,270,688)	3,441,081)	3,423,641)	3,839,556)	3,651,481)
Total reported debt & leases	3,149,034)	3,325,756)	3,506,634)	3,485,513)	3,862,214)	3,676,494)
Total Accenture plc shareholders’ equity	25,692,839)	22,106,097)	19,529,454)	17,000,536)	14,409,008)	10,364,753)
Net deferred tax (assets) liabilities²	(3,759,598)	(3,682,616)	(3,763,494)	(3,973,443)	(4,216,232)	(1,961,078)
Allowance for credit losses³	26,343)	25,786)	32,206)	40,277)	45,538)	49,913)
Deferred revenues⁴	5,561,106)	5,190,763)	4,929,257)	4,327,672)	3,754,059)	3,455,806)
Equity equivalents⁵	1,827,851)	1,533,933)	1,197,969)	394,506)	(416,635)	1,544,641)
Accumulated other comprehensive (income) loss, net of tax⁶	1,743,101)	2,190,342)	1,419,497)	1,561,837)	1,840,577)	1,576,171)
Noncontrolling interests	765,754)	640,991)	567,660)	498,637)	418,683)	359,835)
Adjusted total Accenture plc shareholders’ equity	30,029,545)	26,471,363)	22,714,580)	19,455,516)	16,251,633)	13,845,400)
Short-term investments⁷	(4,575)	(3,973)	(4,294)	(94,309)	(3,313)	(3,192)
Invested capital	33,174,004)	29,793,146)	26,216,920)	22,846,720)	20,110,534)	17,518,702)

Based on: 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), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31).

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.

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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 invested capital increased from 2021 to 2022 and from 2022 to 2023.

Accenture PLC, cost of capital calculations

Aug 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	191,119,074)	191,119,074)	÷	194,268,108)	=	0.98	0.98	×	15.29%	=	15.04%
Outstanding debt³	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					15.09%

Based on: 10-K (reporting date: 2023-08-31).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

Aug 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	157,689,340)	157,689,340)	÷	161,015,096)	=	0.98	0.98	×	15.29%	=	14.97%
Outstanding debt³	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					15.03%

Based on: 10-K (reporting date: 2022-08-31).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

Aug 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	216,082,660)	216,082,660)	÷	219,589,294)	=	0.98	0.98	×	15.29%	=	15.04%
Outstanding debt³	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					15.09%

Based on: 10-K (reporting date: 2021-08-31).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

Aug 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	144,662,081)	144,662,081)	÷	148,147,594)	=	0.98	0.98	×	15.29%	=	14.93%
Outstanding debt³	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					15.00%

Based on: 10-K (reporting date: 2020-08-31).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

Aug 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	117,472,267)	117,472,267)	÷	121,334,481)	=	0.97	0.97	×	15.29%	=	14.80%
Outstanding debt³	22,658)	22,658)	÷	121,334,481)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	3,839,556)	3,839,556)	÷	121,334,481)	=	0.03	0.03	×	0.00% × (1 – 21.00%)	=	0.00%
Total:	121,334,481)					1.00					14.80%

Based on: 10-K (reporting date: 2019-08-31).

¹ US$ in thousands

² Equity. See details »

³ Outstanding debt. See details »

⁴ Operating lease liability. See details »

Aug 31, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	97,842,277)	97,842,277)	÷	101,518,771)	=	0.96	0.96	×	15.29%	=	14.73%
Outstanding debt³	25,013)	25,013)	÷	101,518,771)	=	0.00	0.00	×	0.00% × (1 – 25.70%)	=	0.00%
Operating lease liability⁴	3,651,481)	3,651,481)	÷	101,518,771)	=	0.04	0.04	×	0.00% × (1 – 25.70%)	=	0.00%
Total:	101,518,771)					1.00					14.73%

Based on: 10-K (reporting date: 2018-08-31).

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, comparison to benchmarks

	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019	Aug 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	2,006,504)	2,650,415)	2,815,590)	2,581,969)	2,016,615)	1,798,905)
Invested capital²	33,174,004)	29,793,146)	26,216,920)	22,846,720)	20,110,534)	17,518,702)
Performance Ratio
Economic spread ratio³	6.05%	8.90%	10.74%	11.30%	10.03%	10.27%
Benchmarks
Economic Spread Ratio, Competitors⁴
Adobe Inc.	5.63%	11.06%	13.47%	5.74%	3.84%	1.49%
International Business Machines Corp.	-1.43%	-9.30%	-4.31%	-4.05%	-0.32%	—
Intuit Inc.	-6.01%	-4.96%	2.80%	6.13%	19.80%	17.50%
Microsoft Corp.	16.08%	24.03%	33.04%	31.06%	26.18%	7.84%
Oracle Corp.	-1.11%	-0.83%	7.23%	1.53%	4.25%	-4.75%
Palo Alto Networks Inc.	14.96%	6.81%	-1.88%	-2.91%	0.33%	-2.49%
Salesforce Inc.	-11.94%	-9.51%	-7.19%	-10.23%	-6.22%	—
ServiceNow Inc.	9.02%	4.48%	5.70%	7.32%	6.73%	—
Synopsys Inc.	-3.53%	3.05%	-2.97%	-2.80%	-5.79%	-7.17%

Based on: 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), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,006,504 ÷ 33,174,004 = 6.05%

⁴ Click competitor name to see calculations.

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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 economic spread ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Accenture PLC, economic profit margin calculation, comparison to benchmarks

	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019	Aug 31, 2018
Selected Financial Data (US$ in thousands)
Economic profit¹	2,006,504)	2,650,415)	2,815,590)	2,581,969)	2,016,615)	1,798,905)

Revenues	64,111,745)	61,594,305)	50,533,389)	44,327,039)	43,215,013)	41,603,428)
Add: Increase (decrease) in deferred revenues	370,343)	261,506)	601,585)	573,613)	298,253)	123,038)
Adjusted revenues	64,482,088)	61,855,811)	51,134,974)	44,900,652)	43,513,266)	41,726,466)
Performance Ratio
Economic profit margin²	3.11%	4.28%	5.51%	5.75%	4.63%	4.31%
Benchmarks
Economic Profit Margin, Competitors³
Adobe Inc.	7.04%	12.88%	16.79%	8.24%	5.78%	2.44%
International Business Machines Corp.	-2.56%	-16.15%	-8.22%	-7.04%	-0.54%	—
Intuit Inc.	-9.84%	-9.54%	3.55%	6.90%	13.19%	11.63%
Microsoft Corp.	18.31%	23.03%	27.43%	23.06%	19.36%	5.56%
Oracle Corp.	-2.16%	-1.52%	14.30%	3.49%	7.74%	-8.58%
Palo Alto Networks Inc.	14.86%	7.93%	-2.53%	-4.73%	0.36%	-3.69%
Salesforce Inc.	-30.40%	-26.40%	-16.49%	-25.18%	-12.25%	—
ServiceNow Inc.	7.26%	3.60%	4.93%	5.97%	4.93%	—
Synopsys Inc.	-4.98%	4.29%	-4.73%	-4.81%	-10.01%	-12.23%

Based on: 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), 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 2,006,504 ÷ 64,482,088 = 3.11%

³ Click competitor name to see calculations.

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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.	Accenture PLC economic profit margin deteriorated from 2021 to 2022 and from 2022 to 2023.

Accenture PLC (NYSE:ACN)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin