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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

Workday Inc., economic profit calculation

US$ in millions

12 months ended:	Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Net operating profit after taxes (NOPAT)¹	860)	673)	102)	506)	84)	(113)
Cost of capital²	17.09%	17.15%	16.88%	16.97%	17.05%	16.94%
Invested capital³	9,420)	8,631)	8,178)	7,706)	6,061)	5,129)

Economic profit⁴	(750)	(807)	(1,279)	(803)	(950)	(982)

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

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
= 860 – 17.09% × 9,420 = -750

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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.	Workday Inc. economic profit increased from 2023 to 2024 and from 2024 to 2025.

Workday Inc., NOPAT calculation

US$ in millions

12 months ended:	Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Net income (loss)	526)	1,381)	(367)	29)	(282)	(481)
Deferred income tax expense (benefit)¹	32)	(1,060)	(4)	(21)	(3)	(10)
Increase (decrease) in allowance for credit losses²	(1)	2)	(2)	(3)	8)	1)
Increase (decrease) in unearned revenue³	420)	493)	451)	546)	328)	360)
Increase (decrease) in restructuring liability⁴	57)	—)	—)	—)	—)	—)
Increase (decrease) in equity equivalents⁵	508)	(565)	445)	521)	332)	351)
Interest expense	114)	114)	102)	17)	69)	59)
Interest expense, operating lease liability⁶	16)	12)	8)	6)	8)	10)
Adjusted interest expense	130)	126)	110)	23)	76)	69)
Tax benefit of interest expense⁷	(27)	(27)	(23)	(5)	(16)	(14)
Adjusted interest expense, after taxes⁸	103)	100)	87)	18)	60)	55)
(Gain) loss on marketable securities	—)	(6)	18)	(74)	(14)	(7)
Interest income	(350)	(301)	(98)	(6)	(19)	(41)
Investment income, before taxes	(350)	(307)	(80)	(80)	(33)	(48)
Tax expense (benefit) of investment income⁹	74)	64)	17)	17)	7)	10)
Investment income, after taxes¹⁰	(277)	(243)	(63)	(63)	(26)	(38)
Net operating profit after taxes (NOPAT)	860)	673)	102)	506)	84)	(113)

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

¹ Elimination of deferred tax expense. See details »

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

³ Addition of increase (decrease) in unearned revenue.

⁴ Addition of increase (decrease) in restructuring liability.

⁵ Addition of increase (decrease) in equity equivalents to net income (loss).

⁶ 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 378 × 4.20% = 16

⁷ 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 130 × 21.00% = 27

⁸ Addition of after taxes interest expense to net income (loss).

⁹ 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 350 × 21.00% = 74

¹⁰ 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.	Workday Inc. NOPAT increased from 2023 to 2024 and from 2024 to 2025.

Workday Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Provision for (benefit from) income taxes	112)	(1,025)	107)	(13)	7)	(2)
Less: Deferred income tax expense (benefit)	32)	(1,060)	(4)	(21)	(3)	(10)
Add: Tax savings from interest expense	27)	27)	23)	5)	16)	14)
Less: Tax imposed on investment income	74)	64)	17)	17)	7)	10)
Cash operating taxes	34)	(3)	118)	(4)	20)	13)

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

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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.	Workday Inc. cash operating taxes decreased from 2023 to 2024 but then slightly increased from 2024 to 2025.

Workday Inc., invested capital calculation (financing approach)

US$ in millions

	Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Debt, current	—)	—)	—)	1,222)	1,103)	244)
Debt, noncurrent	2,984)	2,980)	2,976)	617)	692)	1,018)
Operating lease liability¹	378)	316)	273)	263)	443)	308)
Total reported debt & leases	3,362)	3,296)	3,249)	2,103)	2,238)	1,570)
Stockholders’ equity	9,034)	8,082)	5,586)	4,535)	3,278)	2,487)
Net deferred tax (assets) liabilities²	(1,032)	(1,063)	(11)	(8)	(9)	(6)
Allowance for credit losses³	10)	11)	9)	11)	14)	7)
Unearned revenue⁴	4,547)	4,127)	3,634)	3,182)	2,637)	2,309)
Restructuring liability⁵	57)	—)	—)	—)	—)	—)
Equity equivalents⁶	3,582)	3,075)	3,631)	3,186)	2,642)	2,310)
Accumulated other comprehensive (income) loss, net of tax⁷	(84)	(21)	(53)	(8)	55)	(23)
Adjusted stockholders’ equity	12,532)	11,136)	9,164)	7,713)	5,974)	4,773)
Marketable securities⁸	(6,474)	(5,801)	(4,235)	(2,110)	(2,151)	(1,213)
Invested capital	9,420)	8,631)	8,178)	7,706)	6,061)	5,129)

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

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 unearned revenue.

⁵ Addition of restructuring liability.

⁶ Addition of equity equivalents to stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

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.	Workday Inc. invested capital increased from 2023 to 2024 and from 2024 to 2025.

Workday Inc., cost of capital calculations

Jan 31, 2025

	Capital (fair value)¹	Weights					Cost of capital
Equity²	64,619)	64,619)	÷	67,797)	=	0.95	0.95	×	17.78%	=	16.95%
Debt³	2,800)	2,800)	÷	67,797)	=	0.04	0.04	×	3.80% × (1 – 21.00%)	=	0.12%
Operating lease liability⁴	378)	378)	÷	67,797)	=	0.01	0.01	×	4.20% × (1 – 21.00%)	=	0.02%
Total:	67,797)					1.00					17.09%

Based on: 10-K (reporting date: 2025-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	69,780)	69,780)	÷	72,896)	=	0.96	0.96	×	17.78%	=	17.02%
Debt³	2,800)	2,800)	÷	72,896)	=	0.04	0.04	×	3.80% × (1 – 21.00%)	=	0.12%
Operating lease liability⁴	316)	316)	÷	72,896)	=	0.00	0.00	×	3.95% × (1 – 21.00%)	=	0.01%
Total:	72,896)					1.00					17.15%

Based on: 10-K (reporting date: 2024-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	47,897)	47,897)	÷	50,970)	=	0.94	0.94	×	17.78%	=	16.71%
Debt³	2,800)	2,800)	÷	50,970)	=	0.05	0.05	×	3.80% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	273)	273)	÷	50,970)	=	0.01	0.01	×	2.79% × (1 – 21.00%)	=	0.01%
Total:	50,970)					1.00					16.88%

Based on: 10-K (reporting date: 2023-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	57,492)	57,492)	÷	60,347)	=	0.95	0.95	×	17.78%	=	16.94%
Debt³	2,592)	2,592)	÷	60,347)	=	0.04	0.04	×	0.86% × (1 – 21.00%)	=	0.03%
Operating lease liability⁴	263)	263)	÷	60,347)	=	0.00	0.00	×	2.35% × (1 – 21.00%)	=	0.01%
Total:	60,347)					1.00					16.97%

Based on: 10-K (reporting date: 2022-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	60,254)	60,254)	÷	63,265)	=	0.95	0.95	×	17.78%	=	16.93%
Debt³	2,568)	2,568)	÷	63,265)	=	0.04	0.04	×	3.32% × (1 – 21.00%)	=	0.11%
Operating lease liability⁴	443)	443)	÷	63,265)	=	0.01	0.01	×	1.73% × (1 – 21.00%)	=	0.01%
Total:	63,265)					1.00					17.05%

Based on: 10-K (reporting date: 2021-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Jan 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	38,642)	38,642)	÷	41,109)	=	0.94	0.94	×	17.78%	=	16.71%
Debt³	2,159)	2,159)	÷	41,109)	=	0.05	0.05	×	4.92% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	308)	308)	÷	41,109)	=	0.01	0.01	×	3.36% × (1 – 21.00%)	=	0.02%
Total:	41,109)					1.00					16.94%

Based on: 10-K (reporting date: 2020-01-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Workday Inc., economic spread ratio calculation, comparison to benchmarks

	Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	(750)	(807)	(1,279)	(803)	(950)	(982)
Invested capital²	9,420)	8,631)	8,178)	7,706)	6,061)	5,129)
Performance Ratio
Economic spread ratio³	-7.96%	-9.35%	-15.64%	-10.41%	-15.67%	-19.15%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	—	3.53%	4.32%	7.18%	9.01%	9.59%
Adobe Inc.	—	3.76%	3.99%	9.44%	11.84%	4.12%
Cadence Design Systems Inc.	—	-0.59%	9.52%	8.91%	9.14%	9.94%
CrowdStrike Holdings Inc.	-9.58%	-4.64%	-0.96%	-4.23%	-6.49%	4.36%
International Business Machines Corp.	—	-6.41%	-2.47%	-10.27%	-5.21%	-4.87%
Intuit Inc.	—	-5.66%	-7.71%	-6.63%	1.05%	4.42%
Microsoft Corp.	—	12.07%	15.11%	23.06%	32.08%	30.11%
Oracle Corp.	—	-1.22%	-2.24%	-1.85%	6.23%	0.58%
Palantir Technologies Inc.	—	-20.49%	-17.18%	-40.84%	-48.33%	-88.33%
Palo Alto Networks Inc.	—	7.36%	13.42%	5.34%	-3.35%	-4.30%
Salesforce Inc.	-8.74%	-11.33%	-13.59%	-11.17%	-8.89%	-11.91%
ServiceNow Inc.	—	8.24%	7.53%	3.01%	4.22%	5.84%
Synopsys Inc.	—	-5.25%	-4.55%	2.03%	-3.99%	-3.81%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -750 ÷ 9,420 = -7.96%

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.	Workday Inc. economic spread ratio improved from 2023 to 2024 and from 2024 to 2025.

Workday Inc., economic profit margin calculation, comparison to benchmarks

	Jan 31, 2025	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Selected Financial Data (US$ in millions)
Economic profit¹	(750)	(807)	(1,279)	(803)	(950)	(982)

Revenues	8,446)	7,259)	6,216)	5,139)	4,318)	3,627)
Add: Increase (decrease) in unearned revenue	420)	493)	451)	546)	328)	360)
Adjusted revenues	8,866)	7,752)	6,667)	5,685)	4,646)	3,987)
Performance Ratio
Economic profit margin²	-8.45%	-10.41%	-19.18%	-14.12%	-20.44%	-24.63%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	—	2.00%	2.22%	3.46%	4.62%	4.88%
Adobe Inc.	—	4.26%	4.99%	11.00%	14.76%	5.91%
Cadence Design Systems Inc.	—	-0.91%	9.48%	8.89%	9.28%	10.01%
CrowdStrike Holdings Inc.	-15.76%	-7.28%	-1.29%	-6.62%	-13.49%	3.83%
International Business Machines Corp.	—	-11.34%	-4.40%	-17.83%	-9.95%	-8.47%
Intuit Inc.	—	-8.70%	-12.63%	-12.75%	1.33%	4.98%
Microsoft Corp.	—	16.87%	17.20%	22.10%	26.63%	22.35%
Oracle Corp.	—	-2.32%	-4.34%	-3.39%	12.32%	1.33%
Palantir Technologies Inc.	—	-17.77%	-9.22%	-68.52%	-79.60%	-179.93%
Palo Alto Networks Inc.	—	7.81%	13.32%	6.22%	-4.50%	-6.98%
Salesforce Inc.	-18.93%	-26.22%	-34.61%	-31.00%	-20.40%	-29.31%
ServiceNow Inc.	—	6.78%	6.06%	2.42%	3.65%	4.77%
Synopsys Inc.	—	-8.80%	-6.42%	2.87%	-6.34%	-6.54%

Based on: 10-K (reporting date: 2025-01-31), 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31).

¹ Economic profit. See details »

² 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -750 ÷ 8,866 = -8.45%

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.	Workday Inc. economic profit margin improved from 2023 to 2024 and from 2024 to 2025.

Workday Inc. (NASDAQ:WDAY)

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