Stock Analysis on Net
Stock Analysis on Net

Ross Stores Inc. (NASDAQ:ROST)

$22.49

This company has been moved to the archive! The financial data has not been updated since December 7, 2022.

Economic Value Added (EVA)

Microsoft Excel

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.

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Economic Profit

Ross Stores Inc., economic profit calculation

US$ in thousands

Microsoft Excel
12 months ended: Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

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
= – × =

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. Ross Stores Inc. economic profit decreased from 2020 to 2021 but then increased from 2021 to 2022 not reaching 2020 level.

Net Operating Profit after Taxes (NOPAT)

Ross Stores Inc., NOPAT calculation

US$ in thousands

Microsoft Excel
12 months ended: Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Net earnings
Deferred income tax expense (benefit)1
Increase (decrease) in equity equivalents2
Interest expense
Interest expense, operating lease liability3
Adjusted interest expense
Tax benefit of interest expense4
Adjusted interest expense, after taxes5
Interest income
Investment income, before taxes
Tax expense (benefit) of investment income6
Investment income, after taxes7
Net operating profit after taxes (NOPAT)

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

1 Elimination of deferred tax expense. See details »

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

3 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

4 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =

5 Addition of after taxes interest expense to net earnings.

6 2022 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

7 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. Ross Stores Inc. NOPAT decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Cash Operating Taxes

Ross Stores Inc., cash operating taxes calculation

US$ in thousands

Microsoft Excel
12 months ended: Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
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 (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

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. Ross Stores Inc. cash operating taxes decreased from 2020 to 2021 but then increased from 2021 to 2022 exceeding 2020 level.

Invested Capital

Ross Stores Inc., invested capital calculation (financing approach)

US$ in thousands

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Current portion of long-term debt
Long-term debt, excluding current portion
Operating lease liability1
Total reported debt & leases
Stockholders’ equity
Net deferred tax (assets) liabilities2
Equity equivalents3
Accumulated other comprehensive (income) loss, net of tax4
Adjusted stockholders’ equity
Construction-in-progress5
Invested capital

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

1 Addition of capitalized operating leases.

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

3 Addition of equity equivalents to stockholders’ equity.

4 Removal of accumulated other comprehensive income.

5 Subtraction of construction-in-progress.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Ross Stores Inc. invested capital increased from 2020 to 2021 and from 2021 to 2022.

Cost of Capital

Ross Stores Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Senior Notes3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2022-01-29).

1 US$ in thousands

2 Equity. See details »

3 Senior Notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Senior Notes3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2021-01-30).

1 US$ in thousands

2 Equity. See details »

3 Senior Notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Senior Notes3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (reporting date: 2020-02-01).

1 US$ in thousands

2 Equity. See details »

3 Senior Notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Senior Notes3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

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

1 US$ in thousands

2 Equity. See details »

3 Senior Notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Senior Notes3 ÷ = × × (1 – 34.00%) =
Operating lease liability4 ÷ = × × (1 – 34.00%) =
Total:

Based on: 10-K (reporting date: 2018-02-03).

1 US$ in thousands

2 Equity. See details »

3 Senior Notes. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Senior Notes3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (reporting date: 2017-01-28).

1 US$ in thousands

2 Equity. See details »

3 Senior Notes. See details »

4 Operating lease liability. See details »

Economic Spread Ratio

Ross Stores Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

1 Economic profit. See details »

2 Invested capital. See details »

3 2022 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. Ross Stores Inc. economic spread ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 not reaching 2020 level.

Economic Profit Margin

Ross Stores Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Jan 29, 2022 Jan 30, 2021 Feb 1, 2020 Feb 2, 2019 Feb 3, 2018 Jan 28, 2017
Selected Financial Data (US$ in thousands)
Economic profit1
Sales
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Amazon.com Inc.
Home Depot Inc.
Lowe’s Cos. Inc.
TJX Cos. Inc.

Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).

1 Economic profit. See details »

2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales
= 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 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. Ross Stores Inc. economic profit margin deteriorated from 2020 to 2021 but then improved from 2021 to 2022 not reaching 2020 level.