Stock Analysis on Net
Stock Analysis on Net

Accenture PLC (NYSE:ACN)

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Economic Value Added (EVA)

Microsoft Excel LibreOffice Calc

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

Microsoft Excel LibreOffice Calc
12 months ended: Aug 31, 2021 Aug 31, 2020 Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (filing date: 2021-10-15), 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2021 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =

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 increased from 2019 to 2020 and from 2020 to 2021.

Net Operating Profit after Taxes (NOPAT)

Accenture PLC, NOPAT calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Aug 31, 2021 Aug 31, 2020 Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016
Net income attributable to Accenture plc
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for credit losses2
Increase (decrease) in deferred revenues3
Increase (decrease) in equity equivalents4
Interest expense
Interest expense, operating lease liability5
Adjusted interest expense
Tax benefit of interest expense6
Adjusted interest expense, after taxes7
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income8
Investment income, after taxes9
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2021-10-15), 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28).

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 2021 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

6 2021 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

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

8 2021 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

9 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 increased from 2019 to 2020 and from 2020 to 2021.

Cash Operating Taxes

Accenture PLC, cash operating taxes calculation

US$ in thousands

Microsoft Excel LibreOffice Calc
12 months ended: Aug 31, 2021 Aug 31, 2020 Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016
Income tax expense
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: 2021-10-15), 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28).

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 decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Invested Capital

Accenture PLC, invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel LibreOffice Calc
Aug 31, 2021 Aug 31, 2020 Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016
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
Allowance for credit losses3
Deferred revenues4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Noncontrolling interests
Adjusted total Accenture plc shareholders’ equity
Short-term investments7
Invested capital

Based on: 10-K (filing date: 2021-10-15), 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28).

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.

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 2019 to 2020 and from 2020 to 2021.

Cost of Capital

Accenture PLC, cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2021-10-15).

1 US$ in thousands

2 Equity. See details »

3 Outstanding debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2020-10-22).

1 US$ in thousands

2 Equity. See details »

3 Outstanding debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Outstanding debt3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2019-10-29).

1 US$ in thousands

2 Equity. See details »

3 Outstanding debt. See details »

4 Operating lease liability. See details »

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

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 »

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

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 »

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

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 »

Economic Spread Ratio

Accenture PLC, economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2021 Aug 31, 2020 Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016
Selected Financial Data (US$ in thousands)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Adobe Inc.
Autodesk Inc.
Automatic Data Processing Inc.
Fidelity National Information Services Inc.
Fiserv Inc.
International Business Machines Corp.
Intuit Inc.
Mastercard Inc.
Microsoft Corp.
Oracle Corp.
PayPal Holdings Inc.
salesforce.com inc.
ServiceNow Inc.
Visa Inc.

Based on: 10-K (filing date: 2021-10-15), 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28).

1 Economic profit. See details »

2 Invested capital. See details »

3 2021 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

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 improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021.

Economic Profit Margin

Accenture PLC, economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2021 Aug 31, 2020 Aug 31, 2019 Aug 31, 2018 Aug 31, 2017 Aug 31, 2016
Selected Financial Data (US$ in thousands)
Economic profit1
 
Revenues
Add: Increase (decrease) in deferred revenues
Adjusted revenues
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Adobe Inc.
Autodesk Inc.
Automatic Data Processing Inc.
Fidelity National Information Services Inc.
Fiserv Inc.
International Business Machines Corp.
Intuit Inc.
Mastercard Inc.
Microsoft Corp.
Oracle Corp.
PayPal Holdings Inc.
salesforce.com inc.
ServiceNow Inc.
Visa Inc.

Based on: 10-K (filing date: 2021-10-15), 10-K (filing date: 2020-10-22), 10-K (filing date: 2019-10-29), 10-K (filing date: 2018-10-24), 10-K (filing date: 2017-10-26), 10-K (filing date: 2016-10-28).

1 Economic profit. See details »

2 2021 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × ÷ =

3 Click competitor name to see calculations.

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 improved from 2019 to 2020 but then slightly deteriorated from 2020 to 2021.