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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

Starbucks Corp., economic profit calculation

US$ in thousands

12 months ended:	Sep 29, 2024	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019
Net operating profit after taxes (NOPAT)¹	4,408,732)	4,602,842)	3,732,356)	4,625,159)	1,475,541)	2,231,571)
Cost of capital²	11.29%	11.50%	11.41%	11.43%	11.04%	11.35%
Invested capital³	23,526,800)	22,171,000)	20,459,700)	23,683,800)	22,970,900)	20,030,637)

Economic profit⁴	1,751,382)	2,052,465)	1,398,195)	1,917,909)	(1,061,384)	(41,338)

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 4,408,732 – 11.29% × 23,526,800 = 1,751,382

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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.	Starbucks Corp. economic profit increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

Starbucks Corp., NOPAT calculation

US$ in thousands

12 months ended:	Sep 29, 2024	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019
Net earnings attributable to Starbucks	3,760,900)	4,124,500)	3,281,600)	4,199,300)	928,300)	3,599,200)
Deferred income tax expense (benefit)¹	(13,600)	(59,300)	23,100)	(125,000)	(28,500)	(1,448,800)
Increase (decrease) in allowance for credit losses²	(2,600)	(3,400)	1,600)	(1,500)	20,400)	(1,300)
Increase (decrease) in stored value card liability and deferred revenue³	(57,200)	(119,600)	(137,500)	4,100)	41,600)	(405,200)
Increase (decrease) in equity equivalents⁴	(73,400)	(182,300)	(112,800)	(122,400)	33,500)	(1,855,300)
Interest expense	562,000)	550,100)	482,900)	469,800)	437,000)	331,000)
Interest expense, operating lease liability⁵	347,980)	285,203)	227,783)	224,733)	222,763)	293,028)
Adjusted interest expense	909,980)	835,303)	710,683)	694,533)	659,763)	624,028)
Tax benefit of interest expense⁶	(191,096)	(175,414)	(149,244)	(145,852)	(138,550)	(131,046)
Adjusted interest expense, after taxes⁷	718,884)	659,889)	561,440)	548,681)	521,212)	492,982)
(Gain) loss on marketable securities	1,200)	700)	400)	(1,800)	(4,900)	(900)
Investment income, before taxes	1,200)	700)	400)	(1,800)	(4,900)	(900)
Tax expense (benefit) of investment income⁸	(252)	(147)	(84)	378)	1,029)	189)
Investment income, after taxes⁹	948)	553)	316)	(1,422)	(3,871)	(711)
Net income (loss) attributable to noncontrolling interest	1,400)	200)	1,800)	1,000)	(3,600)	(4,600)
Net operating profit after taxes (NOPAT)	4,408,732)	4,602,842)	3,732,356)	4,625,159)	1,475,541)	2,231,571)

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in stored value card liability and deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net earnings attributable to Starbucks.

⁵ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 10,234,700 × 3.40% = 347,980

⁶ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 909,980 × 21.00% = 191,096

⁷ Addition of after taxes interest expense to net earnings attributable to Starbucks.

⁸ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= -1,200 × 21.00% = -252

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.	Starbucks Corp. NOPAT increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

Starbucks Corp., cash operating taxes calculation

US$ in thousands

12 months ended:	Sep 29, 2024	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019
Income tax expense	1,207,300)	1,277,200)	948,500)	1,156,600)	239,700)	871,600)
Less: Deferred income tax expense (benefit)	(13,600)	(59,300)	23,100)	(125,000)	(28,500)	(1,448,800)
Add: Tax savings from interest expense	191,096)	175,414)	149,244)	145,852)	138,550)	131,046)
Less: Tax imposed on investment income	(252)	(147)	(84)	378)	1,029)	189)
Cash operating taxes	1,412,248)	1,512,061)	1,074,728)	1,427,074)	405,721)	2,451,257)

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

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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.	Starbucks Corp. cash operating taxes increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

Starbucks Corp., invested capital calculation (financing approach)

US$ in thousands

	Sep 29, 2024	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019
Current portion of long-term debt	1,248,900)	1,818,600)	1,749,000)	998,900)	1,249,900)	—)
Long-term debt, excluding current portion	14,319,500)	13,547,600)	13,119,900)	13,616,900)	14,659,600)	11,167,000)
Operating lease liability¹	10,234,700)	9,200,100)	8,760,900)	8,989,300)	8,910,500)	8,799,637)
Total reported debt & leases	25,803,100)	24,566,300)	23,629,800)	23,605,100)	24,820,000)	19,966,637)
Shareholders’ deficit	(7,448,900)	(7,994,800)	(8,706,600)	(5,321,200)	(7,805,100)	(6,232,200)
Net deferred tax (assets) liabilities²	(1,745,600)	(1,755,200)	(1,681,100)	(1,726,300)	(1,631,800)	(1,579,400)
Allowance for credit losses³	21,200)	23,800)	27,200)	25,600)	27,100)	6,700)
Stored value card liability and deferred revenue⁴	7,744,800)	7,802,000)	7,921,600)	8,059,100)	8,055,000)	8,013,400)
Equity equivalents⁵	6,020,400)	6,070,600)	6,267,700)	6,358,400)	6,450,300)	6,440,700)
Accumulated other comprehensive (income) loss, net of tax⁶	428,800)	778,200)	463,200)	(147,200)	364,600)	503,300)
Noncontrolling interests	7,300)	7,000)	7,900)	6,700)	5,700)	1,200)
Adjusted shareholders’ deficit	(992,400)	(1,139,000)	(1,967,800)	896,700)	(984,500)	713,000)
Work in progress⁷	(750,900)	(607,500)	(558,700)	(374,100)	(377,300)	(358,500)
Marketable securities⁸	(533,000)	(648,800)	(643,600)	(443,900)	(487,300)	(290,500)
Invested capital	23,526,800)	22,171,000)	20,459,700)	23,683,800)	22,970,900)	20,030,637)

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

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 stored value card liability and deferred revenue.

⁵ Addition of equity equivalents to shareholders’ deficit.

⁶ Removal of accumulated other comprehensive income.

⁷ Subtraction of work in progress.

⁸ Subtraction of marketable 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.	Starbucks Corp. invested capital increased from 2022 to 2023 and from 2023 to 2024.

Starbucks Corp., cost of capital calculations

Sep 29, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	111,407,188)	111,407,188)	÷	136,288,588)	=	0.82	0.82	×	13.17%	=	10.77%
Debt³	14,646,700)	14,646,700)	÷	136,288,588)	=	0.11	0.11	×	3.83% × (1 – 21.00%)	=	0.33%
Operating lease liability⁴	10,234,700)	10,234,700)	÷	136,288,588)	=	0.08	0.08	×	3.40% × (1 – 21.00%)	=	0.20%
Total:	136,288,588)					1.00					11.29%

Based on: 10-K (reporting date: 2024-09-29).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 1, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	120,001,419)	120,001,419)	÷	142,661,219)	=	0.84	0.84	×	13.17%	=	11.08%
Debt³	13,459,700)	13,459,700)	÷	142,661,219)	=	0.09	0.09	×	3.55% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	9,200,100)	9,200,100)	÷	142,661,219)	=	0.06	0.06	×	3.10% × (1 – 21.00%)	=	0.16%
Total:	142,661,219)					1.00					11.50%

Based on: 10-K (reporting date: 2023-10-01).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 2, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	112,427,010)	112,427,010)	÷	134,414,910)	=	0.84	0.84	×	13.17%	=	11.02%
Debt³	13,227,000)	13,227,000)	÷	134,414,910)	=	0.10	0.10	×	3.30% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	8,760,900)	8,760,900)	÷	134,414,910)	=	0.07	0.07	×	2.60% × (1 – 21.00%)	=	0.13%
Total:	134,414,910)					1.00					11.41%

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

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Oct 3, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	129,967,096)	129,967,096)	÷	154,970,496)	=	0.84	0.84	×	13.17%	=	11.05%
Debt³	16,014,100)	16,014,100)	÷	154,970,496)	=	0.10	0.10	×	3.29% × (1 – 21.00%)	=	0.27%
Operating lease liability⁴	8,989,300)	8,989,300)	÷	154,970,496)	=	0.06	0.06	×	2.50% × (1 – 21.00%)	=	0.11%
Total:	154,970,496)					1.00					11.43%

Based on: 10-K (reporting date: 2021-10-03).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 27, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	109,776,161)	109,776,161)	÷	136,624,161)	=	0.80	0.80	×	13.17%	=	10.58%
Debt³	17,937,500)	17,937,500)	÷	136,624,161)	=	0.13	0.13	×	3.19% × (1 – 21.00%)	=	0.33%
Operating lease liability⁴	8,910,500)	8,910,500)	÷	136,624,161)	=	0.07	0.07	×	2.50% × (1 – 21.00%)	=	0.13%
Total:	136,624,161)					1.00					11.04%

Based on: 10-K (reporting date: 2020-09-27).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Sep 29, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	99,452,010)	99,452,010)	÷	120,284,647)	=	0.83	0.83	×	13.17%	=	10.89%
Debt³	12,033,000)	12,033,000)	÷	120,284,647)	=	0.10	0.10	×	3.33% × (1 – 21.00%)	=	0.26%
Operating lease liability⁴	8,799,637)	8,799,637)	÷	120,284,647)	=	0.07	0.07	×	3.33% × (1 – 21.00%)	=	0.19%
Total:	120,284,647)					1.00					11.35%

Based on: 10-K (reporting date: 2019-09-29).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Starbucks Corp., economic spread ratio calculation, comparison to benchmarks

	Sep 29, 2024	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	1,751,382)	2,052,465)	1,398,195)	1,917,909)	(1,061,384)	(41,338)
Invested capital²	23,526,800)	22,171,000)	20,459,700)	23,683,800)	22,970,900)	20,030,637)
Performance Ratio
Economic spread ratio³	7.44%	9.26%	6.83%	8.10%	-4.62%	-0.21%
Benchmarks
Economic Spread Ratio, Competitors⁴
Airbnb Inc.	—	13.09%	14.51%	-7.74%	-114.05%	—
Booking Holdings Inc.	—	16.89%	6.00%	-11.42%	-11.10%	30.55%
Chipotle Mexican Grill Inc.	—	7.64%	3.61%	-1.07%	-3.10%	-2.86%
McDonald’s Corp.	—	8.77%	5.97%	8.39%	4.13%	8.37%

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 1,751,382 ÷ 23,526,800 = 7.44%

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.	Starbucks Corp. economic spread ratio improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024 not reaching 2022 level.

Starbucks Corp., economic profit margin calculation, comparison to benchmarks

	Sep 29, 2024	Oct 1, 2023	Oct 2, 2022	Oct 3, 2021	Sep 27, 2020	Sep 29, 2019
Selected Financial Data (US$ in thousands)
Economic profit¹	1,751,382)	2,052,465)	1,398,195)	1,917,909)	(1,061,384)	(41,338)

Net revenues	36,176,200)	35,975,600)	32,250,300)	29,060,600)	23,518,000)	26,508,600)
Add: Increase (decrease) in stored value card liability and deferred revenue	(57,200)	(119,600)	(137,500)	4,100)	41,600)	(405,200)
Adjusted net revenues	36,119,000)	35,856,000)	32,112,800)	29,064,700)	23,559,600)	26,103,400)
Performance Ratio
Economic profit margin²	4.85%	5.72%	4.35%	6.60%	-4.51%	-0.16%
Benchmarks
Economic Profit Margin, Competitors³
Airbnb Inc.	—	7.51%	11.46%	-6.97%	-174.62%	—
Booking Holdings Inc.	—	9.03%	4.79%	-15.63%	-23.79%	22.35%
Chipotle Mexican Grill Inc.	—	4.64%	2.25%	-0.78%	-2.54%	-2.16%
McDonald’s Corp.	—	17.21%	11.70%	17.23%	10.05%	16.91%

Based on: 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-10-01), 10-K (reporting date: 2022-10-02), 10-K (reporting date: 2021-10-03), 10-K (reporting date: 2020-09-27), 10-K (reporting date: 2019-09-29).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenues
= 100 × 1,751,382 ÷ 36,119,000 = 4.85%

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.	Starbucks Corp. economic profit margin improved from 2022 to 2023 but then slightly deteriorated from 2023 to 2024 not reaching 2022 level.

Starbucks Corp. (NASDAQ:SBUX)

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