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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

Bed Bath & Beyond Inc., economic profit calculation

US$ in thousands

12 months ended:	Feb 26, 2022	Feb 27, 2021	Feb 29, 2020	Mar 2, 2019	Mar 3, 2018	Feb 25, 2017
Net operating profit after taxes (NOPAT)¹	(301,295)	98,133)	(522,990)	(83,311)	735,312)	935,216)
Cost of capital²	8.93%	11.54%	7.31%	9.57%	9.26%	13.11%
Invested capital³	3,288,320)	4,261,005)	5,094,957)	5,788,203)	6,556,645)	6,680,896)

Economic profit⁴	(595,067)	(393,500)	(895,528)	(637,378)	128,246)	59,280)

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -301,295 – 8.93% × 3,288,320 = -595,067

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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.	Bed Bath & Beyond Inc. economic profit increased from 2020 to 2021 but then slightly decreased from 2021 to 2022.

Bed Bath & Beyond Inc., NOPAT calculation

US$ in thousands

12 months ended:	Feb 26, 2022	Feb 27, 2021	Feb 29, 2020	Mar 2, 2019	Mar 3, 2018	Feb 25, 2017
Net earnings (loss)	(559,623)	(150,773)	(613,816)	(137,224)	424,858)	685,108)
Deferred income tax expense (benefit)¹	127,310)	149,306)	(145,519)	(104,101)	175,204)	24,875)
Increase (decrease) in accrual for severance and related costs²	(8,000)	(55,700)	73,400)	—)	—)	—)
Increase (decrease) in equity equivalents³	119,310)	93,606)	(72,119)	(104,101)	175,204)	24,875)
Interest expense, net	64,702)	76,913)	64,789)	69,474)	65,661)	69,555)
Interest expense, operating lease liability⁴	111,270)	119,669)	141,471)	130,544)	135,186)	155,678)
Adjusted interest expense, net	175,972)	196,582)	206,260)	200,018)	200,847)	225,233)
Tax benefit of interest expense, net⁵	(36,954)	(41,282)	(43,315)	(42,004)	(65,597)	—)
Adjusted interest expense, net, after taxes⁶	139,018)	155,300)	162,945)	158,014)	135,250)	225,233)
Net operating profit after taxes (NOPAT)	(301,295)	98,133)	(522,990)	(83,311)	735,312)	935,216)

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in accrual for severance and related costs.

³ Addition of increase (decrease) in equity equivalents to net earnings (loss).

⁴ 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,854,508 × 6.00% = 111,270

⁵ 2022 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 175,972 × 21.00% = 36,954

⁶ Addition of after taxes interest expense to net earnings (loss).

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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.	Bed Bath & Beyond Inc. NOPAT increased from 2020 to 2021 but then slightly decreased from 2021 to 2022 not reaching 2020 level.

Bed Bath & Beyond Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Feb 26, 2022	Feb 27, 2021	Feb 29, 2020	Mar 2, 2019	Mar 3, 2018	Feb 25, 2017
Provision (benefit) for income taxes	86,967)	(185,989)	(151,037)	(19,385)	270,802)	380,547)
Less: Deferred income tax expense (benefit)	127,310)	149,306)	(145,519)	(104,101)	175,204)	24,875)
Add: Tax savings from interest expense, net	36,954)	41,282)	43,315)	42,004)	65,597)	—)
Cash operating taxes	(3,389)	(294,013)	37,797)	126,720)	161,195)	355,672)

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

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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.	Bed Bath & Beyond Inc. cash operating taxes decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.

Bed Bath & Beyond Inc., invested capital calculation (financing approach)

US$ in thousands

	Feb 26, 2022	Feb 27, 2021	Feb 29, 2020	Mar 2, 2019	Mar 3, 2018	Feb 25, 2017
Current finance lease liabilities	2,494)	—)	1,541)	—)	—)	—)
Noncurrent finance lease liabilities	35,447)	—)	102,412)	3,800)	4,500)	5,100)
Long term debt	1,179,776)	1,190,363)	1,488,400)	1,487,934)	1,492,078)	1,491,603)
Operating lease liability¹	1,854,508)	1,869,828)	2,281,788)	2,298,308)	2,531,568)	2,702,735)
Total reported debt & leases	3,072,225)	3,060,191)	3,874,141)	3,790,042)	4,028,146)	4,199,438)
Shareholders’ equity	174,145)	1,276,936)	1,764,935)	2,560,331)	2,888,628)	2,719,277)
Net deferred tax (assets) liabilities²	136)	(130,022)	(276,528)	(115,080)	(11,025)	(195,469)
Accrual for severance and related costs³	15,000)	17,700)	73,400)	—)	—)	—)
Equity equivalents⁴	15,136)	(112,322)	(203,128)	(115,080)	(11,025)	(195,469)
Accumulated other comprehensive (income) loss, net of tax⁵	46,014)	55,600)	64,909)	58,610)	48,296)	47,250)
Adjusted shareholders’ equity	235,295)	1,220,214)	1,626,716)	2,503,861)	2,925,899)	2,571,058)
Investment securities⁶	(19,200)	(19,400)	(405,900)	(505,700)	(397,400)	(89,600)
Invested capital	3,288,320)	4,261,005)	5,094,957)	5,788,203)	6,556,645)	6,680,896)

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of accrual for severance and related costs.

⁴ Addition of equity equivalents to shareholders’ equity.

⁵ Removal of accumulated other comprehensive income.

⁶ Subtraction of investment securities.

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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.	Bed Bath & Beyond Inc. invested capital decreased from 2020 to 2021 and from 2021 to 2022.

Bed Bath & Beyond Inc., cost of capital calculations

Feb 26, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,304,680)	1,304,680)	÷	4,153,129)	=	0.31	0.31	×	18.76%	=	5.89%
Long term debt and finance lease liabilities³	993,941)	993,941)	÷	4,153,129)	=	0.24	0.24	×	4.89% × (1 – 21.00%)	=	0.92%
Operating lease liability⁴	1,854,508)	1,854,508)	÷	4,153,129)	=	0.45	0.45	×	6.00% × (1 – 21.00%)	=	2.12%
Total:	4,153,129)					1.00					8.93%

Based on: 10-K (reporting date: 2022-02-26).

¹ US$ in thousands

² Equity. See details »

³ Long term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Feb 27, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	2,883,014)	2,883,014)	÷	5,870,842)	=	0.49	0.49	×	18.76%	=	9.21%
Long term debt and finance lease liabilities³	1,118,000)	1,118,000)	÷	5,870,842)	=	0.19	0.19	×	4.76% × (1 – 21.00%)	=	0.72%
Operating lease liability⁴	1,869,828)	1,869,828)	÷	5,870,842)	=	0.32	0.32	×	6.40% × (1 – 21.00%)	=	1.61%
Total:	5,870,842)					1.00					11.54%

Based on: 10-K (reporting date: 2021-02-27).

¹ US$ in thousands

² Equity. See details »

³ Long term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Feb 29, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	833,985)	833,985)	÷	4,345,726)	=	0.19	0.19	×	18.76%	=	3.60%
Long term debt and finance lease liabilities³	1,229,953)	1,229,953)	÷	4,345,726)	=	0.28	0.28	×	5.10% × (1 – 21.00%)	=	1.14%
Operating lease liability⁴	2,281,788)	2,281,788)	÷	4,345,726)	=	0.53	0.53	×	6.20% × (1 – 21.00%)	=	2.57%
Total:	4,345,726)					1.00					7.31%

Based on: 10-K (reporting date: 2020-02-29).

¹ US$ in thousands

² Equity. See details »

³ Long term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Mar 2, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	2,207,212)	2,207,212)	÷	5,997,254)	=	0.37	0.37	×	18.76%	=	6.90%
Long term debt and finance lease liabilities³	1,491,734)	1,491,734)	÷	5,997,254)	=	0.25	0.25	×	4.83% × (1 – 21.00%)	=	0.95%
Operating lease liability⁴	2,298,308)	2,298,308)	÷	5,997,254)	=	0.38	0.38	×	5.68% × (1 – 21.00%)	=	1.72%
Total:	5,997,254)					1.00					9.57%

Based on: 10-K (reporting date: 2019-03-02).

¹ US$ in thousands

² Equity. See details »

³ Long term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Mar 3, 2018

	Capital (fair value)¹	Weights					Cost of capital
Equity²	2,455,448)	2,455,448)	÷	6,483,594)	=	0.38	0.38	×	18.76%	=	7.10%
Long term debt and finance lease liabilities³	1,496,578)	1,496,578)	÷	6,483,594)	=	0.23	0.23	×	4.83% × (1 – 32.66%)	=	0.75%
Operating lease liability⁴	2,531,568)	2,531,568)	÷	6,483,594)	=	0.39	0.39	×	5.34% × (1 – 32.66%)	=	1.40%
Total:	6,483,594)					1.00					9.26%

Based on: 10-K (reporting date: 2018-03-03).

¹ US$ in thousands

² Equity. See details »

³ Long term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Feb 25, 2017

	Capital (fair value)¹	Weights					Cost of capital
Equity²	5,713,251)	5,713,251)	÷	9,912,689)	=	0.58	0.58	×	18.76%	=	10.81%
Long term debt and finance lease liabilities³	1,496,703)	1,496,703)	÷	9,912,689)	=	0.15	0.15	×	4.83% × (1 – 0.00%)	=	0.73%
Operating lease liability⁴	2,702,735)	2,702,735)	÷	9,912,689)	=	0.27	0.27	×	5.76% × (1 – 0.00%)	=	1.57%
Total:	9,912,689)					1.00					13.11%

Based on: 10-K (reporting date: 2017-02-25).

¹ US$ in thousands

² Equity. See details »

³ Long term debt and finance lease liabilities. See details »

⁴ Operating lease liability. See details »

Bed Bath & Beyond Inc., economic spread ratio calculation, comparison to benchmarks

	Feb 26, 2022	Feb 27, 2021	Feb 29, 2020	Mar 2, 2019	Mar 3, 2018	Feb 25, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(595,067)	(393,500)	(895,528)	(637,378)	128,246)	59,280)
Invested capital²	3,288,320)	4,261,005)	5,094,957)	5,788,203)	6,556,645)	6,680,896)
Performance Ratio
Economic spread ratio³	-18.10%	-9.23%	-17.58%	-11.01%	1.96%	0.89%
Benchmarks
Economic Spread Ratio, Competitors⁴
Amazon.com Inc.	-15.62%	4.45%	1.81%	-1.53%	—	—
Home Depot Inc.	25.41%	16.23%	23.33%	23.76%	—	—
Lowe’s Cos. Inc.	24.62%	12.12%	8.23%	-1.29%	—	—
TJX Cos. Inc.	7.34%	-9.58%	8.13%	7.40%	—	—

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -595,067 ÷ 3,288,320 = -18.10%

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.	Bed Bath & Beyond Inc. economic spread ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022.

Bed Bath & Beyond Inc., economic profit margin calculation, comparison to benchmarks

	Feb 26, 2022	Feb 27, 2021	Feb 29, 2020	Mar 2, 2019	Mar 3, 2018	Feb 25, 2017
Selected Financial Data (US$ in thousands)
Economic profit¹	(595,067)	(393,500)	(895,528)	(637,378)	128,246)	59,280)
Net sales	7,867,778)	9,233,028)	11,158,580)	12,028,797)	12,349,301)	12,215,757)
Performance Ratio
Economic profit margin²	-7.56%	-4.26%	-8.03%	-5.30%	1.04%	0.49%
Benchmarks
Economic Profit Margin, Competitors³
Amazon.com Inc.	-8.15%	1.91%	0.70%	-0.69%	—	—
Home Depot Inc.	8.08%	6.11%	7.74%	7.51%	—	—
Lowe’s Cos. Inc.	6.70%	3.84%	3.05%	-0.44%	—	—
TJX Cos. Inc.	2.98%	-6.67%	3.64%	3.30%	—	—

Based on: 10-K (reporting date: 2022-02-26), 10-K (reporting date: 2021-02-27), 10-K (reporting date: 2020-02-29), 10-K (reporting date: 2019-03-02), 10-K (reporting date: 2018-03-03), 10-K (reporting date: 2017-02-25).

¹ Economic profit. See details »

² 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -595,067 ÷ 7,867,778 = -7.56%

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.	Bed Bath & Beyond Inc. economic profit margin improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level.

Bed Bath & Beyond Inc. (NASDAQ:BBBY)

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