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 – 19.41% × 45,311,761 = 317,152
An analysis of the financial performance between August 2020 and August 2025 reveals a significant divergence between the growth of operating profits and the generation of economic value. While nominal profitability increased over the period, the economic profit experienced a substantial decline, indicating that the growth in invested capital outpaced the corresponding growth in net operating profit after taxes (NOPAT).
- Net Operating Profit After Taxes (NOPAT)
- A consistent upward trajectory is observed in NOPAT, which rose from 6,009,567 thousand US$ in 2020 to 9,111,886 thousand US$ in 2025. The most pronounced growth occurred in the final year of the period, representing a significant increase in absolute operating earnings.
- Invested Capital and Cost of Capital
- Invested capital grew aggressively and continuously, nearly doubling from 22,846,720 thousand US$ in 2020 to 45,311,761 thousand US$ in 2025. Throughout this expansion, the cost of capital remained relatively stable, fluctuating narrowly between 19.41% and 20.02%. This stability indicates that the increased capital charge was driven primarily by the volume of investment rather than changes in the weighted average cost of capital.
- Economic Profit Trends
- Economic profit exhibited a sharp downward trend for the majority of the period, falling from 1,465,097 thousand US$ in 2020 to a low of 125,974 thousand US$ in 2024. Although a slight recovery to 317,152 thousand US$ occurred in 2025, the value remains significantly below 2020 levels. This compression suggests that the marginal return on new invested capital has been lower than the cost of capital, thereby eroding the overall economic value added.
The overall financial pattern indicates an expansionary phase where aggressive capital deployment has resulted in higher operating profits, but at the expense of economic efficiency. The narrowing margin of economic profit suggests that the scale of investment has reached a point where the cost of funding the asset base nearly offsets the operating gains generated.
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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 | × | 20.29% | = | 19.23% | ||
| 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 | 19.41% | ||||||||||
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 | × | 20.29% | = | 19.93% | ||
| 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 | 19.99% | ||||||||||
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 | × | 20.29% | = | 19.96% | ||
| 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 | 20.01% | ||||||||||
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 | × | 20.29% | = | 19.87% | ||
| 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 | 19.93% | ||||||||||
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 | × | 20.29% | = | 19.97% | ||
| 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 | 20.02% | ||||||||||
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 | × | 20.29% | = | 19.81% | ||
| 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 | 19.89% | ||||||||||
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 | 317,152) | 125,974) | 372,626) | 1,189,680) | 1,524,044) | 1,465,097) | |
| 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 | 0.70% | 0.34% | 1.12% | 3.99% | 5.81% | 6.41% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Adobe Inc. | 13.20% | 0.92% | 1.09% | 6.58% | 8.97% | 1.25% | |
| AppLovin Corp. | 28.93% | 1.21% | -20.00% | -26.37% | -29.58% | — | |
| Cadence Design Systems Inc. | -1.28% | -2.87% | 7.18% | 6.59% | 6.80% | — | |
| Datadog Inc. | -8.74% | -9.43% | -5.95% | -11.70% | -3.88% | — | |
| International Business Machines Corp. | -0.82% | -7.67% | -3.61% | -11.36% | -6.21% | — | |
| Intuit Inc. | -2.91% | -6.58% | -8.63% | -7.52% | 0.11% | — | |
| Microsoft Corp. | 5.63% | 7.51% | 10.56% | 18.54% | 27.58% | — | |
| Oracle Corp. | -7.90% | -7.76% | -8.56% | -7.56% | 0.65% | — | |
| Palantir Technologies Inc. | 41.88% | -12.04% | -8.76% | -32.50% | -39.96% | — | |
| Palo Alto Networks Inc. | -3.82% | 5.37% | 11.50% | 3.53% | -5.17% | — | |
| Salesforce Inc. | -12.37% | -14.18% | -17.63% | -14.50% | -12.36% | — | |
| ServiceNow Inc. | 2.66% | 5.94% | 5.23% | 0.73% | 1.94% | — | |
| Synopsys Inc. | -12.39% | -8.14% | -7.44% | -0.84% | -6.86% | -6.67% | |
| Workday Inc. | -11.52% | -12.93% | -19.15% | -13.98% | -19.23% | — | |
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 × 317,152 ÷ 45,311,761 = 0.70%
4 Click competitor name to see calculations.
The financial performance from 2020 to 2025 is characterized by a significant divergence between the expansion of the capital base and the generation of economic profit, resulting in a sustained compression of the economic spread ratio.
- Economic Profit Trends
- Economic profit experienced a general downward trajectory over the analyzed period. After reaching a peak of 1,524,044 thousand USD in 2021, values declined sharply, reaching a nadir of 125,974 thousand USD in 2024. A partial recovery was observed in 2025, with profit rising to 317,152 thousand USD, although this remains substantially below 2020 levels.
- Invested Capital Growth
- There is a consistent and aggressive increase in invested capital. The capital base grew from 22,846,720 thousand USD in 2020 to 45,311,761 thousand USD by 2025. This represents a near-doubling of the invested capital over the six-year window, indicating significant resource deployment or expansion of the asset base.
- Economic Spread Ratio Analysis
- The economic spread ratio demonstrates a severe contraction, falling from 6.41% in 2020 to a low of 0.34% in 2024. This decline indicates that the return on invested capital has converged toward the cost of capital, significantly reducing the value created above the minimum required return. While the ratio improved slightly to 0.70% in 2025, the overall trend reflects a diminished ability to generate excess returns relative to the scale of investment.
The simultaneous increase in invested capital and the decrease in economic profit suggest a period of diminishing marginal returns on new investments. The sharp decline in the economic spread ratio through 2024 highlights a period of efficiency erosion, though the 2025 data indicates the beginning of a potential stabilization in value creation.
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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 | 317,152) | 125,974) | 372,626) | 1,189,680) | 1,524,044) | 1,465,097) | |
| 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 | 0.45% | 0.19% | 0.58% | 1.92% | 2.98% | 3.26% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Adobe Inc. | 11.94% | 1.04% | 1.37% | 7.67% | 11.17% | 1.79% | |
| AppLovin Corp. | 29.73% | 1.17% | -27.38% | -49.38% | -59.23% | — | |
| Cadence Design Systems Inc. | -1.92% | -4.40% | 7.15% | 6.57% | 6.91% | — | |
| Datadog Inc. | -5.18% | -8.56% | -3.72% | -8.10% | -3.08% | — | |
| International Business Machines Corp. | -1.46% | -13.55% | -6.43% | -19.67% | -11.82% | — | |
| Intuit Inc. | -3.75% | -10.11% | -14.13% | -14.48% | 0.14% | — | |
| Microsoft Corp. | 8.39% | 10.50% | 12.02% | 17.77% | 22.89% | — | |
| Oracle Corp. | -15.82% | -14.76% | -16.57% | -13.87% | 1.29% | — | |
| Palantir Technologies Inc. | 21.69% | -10.44% | -4.70% | -54.53% | -65.82% | — | |
| Palo Alto Networks Inc. | -4.52% | 5.70% | 11.42% | 4.11% | -6.95% | — | |
| Salesforce Inc. | -26.71% | -32.78% | -44.58% | -40.27% | -28.34% | — | |
| ServiceNow Inc. | 2.94% | 4.88% | 4.21% | 0.58% | 1.68% | — | |
| Synopsys Inc. | -72.30% | -13.64% | -10.49% | -1.18% | -10.92% | -11.45% | |
| Workday Inc. | -12.24% | -14.39% | -23.49% | -18.95% | -25.09% | — | |
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 × 317,152 ÷ 70,572,494 = 0.45%
3 Click competitor name to see calculations.
A divergent trend is observed between the growth of adjusted revenues and the generation of economic profit from 2020 to 2025. While top-line figures exhibit consistent expansion, the value created in excess of the cost of capital has experienced a substantial contraction over the majority of the analyzed period.
- Adjusted Revenues Trend
- Adjusted revenues demonstrated steady and uninterrupted growth, rising from US$ 44,900,652 thousand in 2020 to US$ 70,572,494 thousand by 2025. This upward trajectory indicates a consistent increase in the scale of operations.
- Economic Profit Trajectory
- Economic profit reached a peak of US$ 1,524,044 thousand in 2021 before entering a period of significant decline. The most acute contraction occurred between 2022 and 2024, with the value dropping to a minimum of US$ 125,974 thousand in 2024. A partial reversal of this trend was observed in 2025, as economic profit increased to US$ 317,152 thousand.
- Economic Profit Margin Analysis
- The economic profit margin shows a sharp and consistent compression from 3.26% in 2020 to 0.19% in 2024. Despite a modest recovery to 0.45% in 2025, the margin remains substantially lower than at the start of the period. This suggests that while revenues have scaled, the efficiency of capital utilization or the ability to generate returns above the cost of capital has diminished significantly.
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