Accenture PLC (NYSE:ACN)

Current Tax Expense

The current tax expense generally increased from 1,418,067 thousand US$ in 2020 to a peak of 2,420,501 thousand US$ in 2022. After 2022, it shows a slight downward trend, decreasing to 2,084,645 thousand US$ by 2025. This suggests an initial growth in taxable income or rates, followed by a moderate decline or changes in tax planning strategies.

Deferred Tax Expense (Benefit)

The deferred tax expense exhibits considerable variability and notable fluctuations over the years. It increased to 170,951 thousand US$ in 2020 but then sharply declined to negative figures starting 2022 (-213,294 thousand US$), reflecting deferred tax benefits rather than expenses. The deferred tax turned positive again in 2025 with 357,348 thousand US$, indicating shifts in timing differences or tax recognition policies affecting deferred tax balances.

Total Income Tax Expense

The total income tax expense rose steadily from 1,589,018 thousand US$ in 2020 to 2,287,126 thousand US$ in 2024, despite some volatility in its components. In 2023, it decreased slightly to 2,135,802 thousand US$ before increasing again in 2025 to 2,437,993 thousand US$. This overall upward trend points to growing tax obligations over the period, influenced mainly by current tax expenses and partially offset by fluctuating deferred tax benefits.

U.S. federal statutory income tax rate

The federal statutory income tax rate remains stable at 21% throughout the entire period from 2020 to 2025, indicating no legislative changes affecting this rate.

U.S. state and local taxes, net

There is a general downward trend in U.S. state and local taxes from 1.7% in 2020 to 0.7% in 2025. This suggests either changes in tax policies at these levels, improved tax planning, or shifts in geographic earnings mix reducing exposure to these taxes.

Non-U.S. operations taxed at other rates

This rate fluctuates over the years, starting at 0.7% in 2020, increasing to 1.4% in 2023, and then slightly declining to 1% by 2025. This variability may reflect changes in international tax regulations or adjustments in the geographic distribution of income.

Final determinations

The percentage for final determinations is consistently negative, ranging from -1.9% in 2020 to -1.5% in 2025. This indicates recurring downward adjustments to tax liabilities or resolution of prior years' uncertainties, having a reducing effect on the overall tax rate.

Other net activity in unrecognized tax benefits

This component shows a gradual increase in the percentage from 2.4% in 2020 to 3% in 2025, suggesting rising recognition of uncertain tax benefits or less conservative tax positions, which increases the effective tax burden.

Excess tax benefits from share based payments

The value here is consistently negative, with a notable decline to -3% in 2022 but improving towards -0.6% by 2025. This fluctuation implies variability in the tax benefits recognized from share-based compensation, affecting tax rates favorably when more negative.

Foreign-derived intangible income deduction

This deduction appears from 2021 onwards, ranging from -0.9% to -2.3%, then stabilizing near -1.4% in the last years. It provides a modest tax reduction related to foreign-derived intangible income but shows some volatility over the periods.

Other, net

The "Other, net" category shows variability without a clear trend, oscillating between 1.1% and 3.1%. This indicates miscellaneous tax items that fluctuate year-to-year, occasionally having a more pronounced impact.

Effective income tax rate

The effective income tax rate remains relatively stable, fluctuating slightly between 22.8% and 24% over the six-year span. Despite variations in underlying components, the overall tax rate demonstrates resilience with modest changes, reflecting balanced shifts among various tax elements.

The financial data reveals multiple trends across various financial items over the six-year period.

Pensions

Initially, pension liabilities increased steadily from 443,231 thousand USD in 2020 to 542,749 thousand USD in 2024, followed by a decrease to 494,346 thousand USD in 2025. In contrast, the related liabilities showed significant negative figures starting in 2021, deepening in 2023, but slightly improving in the last two years.

Compensation and Benefits

There was a marked increase from 574,349 thousand USD in 2020 to a peak of 930,284 thousand USD in 2022. The figure then decreased notably in 2023 and 2024 before rising again in 2025, indicating some volatility in employment-related costs.

Share-based Compensation

This item consistently increased year over year, from 334,061 thousand USD in 2020 reaching 603,195 thousand USD in 2025, reflecting a growing emphasis on equity incentives.

Tax Credit Carryforwards

This asset displayed strong growth throughout the period, progressing from 659,835 thousand USD in 2020 to 1,544,834 thousand USD in 2025, suggesting expanding available tax credits.

Net Operating Loss Carryforwards

Values fluctuated with some declines and recoveries, starting at 159,506 thousand USD in 2020, dipping slightly, then rising to 287,818 thousand USD in 2024, and slightly declining again in 2025, indicating variable utilization or accumulation of operating losses.

Deferred Amortization Deductions

After peaking in 2021 at 857,441 thousand USD, there was a gradual decline down to 649,143 thousand USD by 2025, reflecting a decreasing deferred amortization balance.

Indirect Effects of Unrecognized Tax Benefits

Showed general growth with some volatility, rising overall from 279,105 thousand USD in 2020 to 399,504 thousand USD in 2024 before slightly decreasing in 2025.

Licenses and Other Intangibles

This category consistently declined, from 1,752,612 thousand USD in 2020 down to 651,160 thousand USD in 2025, implying significant amortization or disposals of intangible assets.

Leases

The reported asset value fluctuated slightly without a clear trend while the lease liabilities fluctuated as well but generally remained substantial. There was some reduction in reported lease assets in 2025.

Capitalized Research Costs

Data is available only from 2023 onward, showing a jump from 363,135 thousand USD to 667,999 thousand USD in 2024, then dropping again in 2025, indicating variable capitalization of research expenses.

Other Assets

Consistent growth was observed, with values rising steadily from 396,170 thousand USD in 2020 to over 1,185,022 thousand USD by 2025, suggesting expansion in miscellaneous asset categories.

Deferred Tax Assets

This figure grew notably, from 6,156,754 thousand USD in 2020 to a peak of 7,981,132 thousand USD in 2024, with a slight decrease in 2025. Conversely, the valuation allowance increased in absolute negative value, indicating greater provisions against deferred tax assets, which affected the net deferred tax assets.

Investments in Subsidiaries

Represented as negative values, these increased in absolute terms, indicating rising investment outlays or recorded impairments, reaching a peak negative value in 2024.

Intangibles (Liabilities or Amortizations)

Consistently increased negatively, moving from -298,181 thousand USD in 2020 to -813,876 thousand USD in 2025, reflecting ongoing amortization or diminishing intangible asset values.

Revenue Recognition Adjustments

Data available for 2024 and 2025 showed increasing negative balances, which may reflect adjustments or reversals related to revenue recognition policies.

Other Liabilities

These liabilities increased from -288,574 thousand USD in 2020 to a maximum negative balance around 635,086 thousand USD in 2024, before reducing slightly in 2025.

Deferred Tax Liabilities

Consistently increased from -1,425,512 thousand USD in 2020 to substantially higher negative values exceeding -2,670,000 thousand USD by 2025, which may impact net tax positions adversely.

Net Deferred Tax Assets (Liabilities)

After reaching a high in 2020 of 3,973,443 thousand USD, this figure generally declined with fluctuations to 3,319,284 thousand USD in 2025, indicating a moderate erosion of net deferred tax asset positions.

Deferred Tax Assets

The deferred tax assets exhibit a slight overall declining trend from 2020 through 2025. Beginning at approximately 4,153,146 thousand US dollars in 2020, the value decreases steadily to around 3,791,215 thousand US dollars by 2025. This represents a reduction of about 8.7% over the six-year period. The data shows minor fluctuations, including a small increase from 2022 to 2023 before resuming the downward trend.

Deferred Tax Liabilities

Deferred tax liabilities display a consistent upward trajectory throughout the period. Starting at 179,703 thousand US dollars in 2020, these liabilities almost triple, reaching approximately 471,931 thousand US dollars by 2025. This significant increase indicates growing future tax obligations or timing differences that will likely impact future cash flows. Each year presents a steady incremental rise without any periods of decline.

Overall Insights

The simultaneous decline in deferred tax assets coupled with the increase in deferred tax liabilities suggests a changing tax position over the analyzed period. This dynamic may reflect alterations in temporary differences or shifts in tax planning strategies. The rising deferred tax liabilities contrast with the modest reduction in deferred tax assets, signaling a potential increase in net deferred tax liability in the future, which could have implications for the entity’s tax expense and cash flow management.

The financial data indicates consistent growth across all major balance sheet and income statement items over the analyzed periods. Total assets, both reported and adjusted for deferred income tax, demonstrate a steady upward trajectory, reflecting ongoing expansion in the company's asset base. This growth is evident from 2020 through 2025, with adjusted total assets increasing from approximately $32.9 billion to $61.6 billion, highlighting an almost doubling of asset size within six years.

Total liabilities also show a gradual increase during the same timeframe. The difference between reported and adjusted liabilities remains comparatively small, implying that deferred income tax adjustments have a moderate impact on the liability figures. Adjusted total liabilities rose from about $19.4 billion to $32.7 billion, suggesting an increase in the company's obligations, albeit in alignment with asset growth.

The shareholders’ equity figures, both reported and adjusted, consistently rise year-over-year, signaling strengthening equity positions. Adjusted shareholders’ equity grew from roughly $13.0 billion in 2020 to $27.9 billion in 2025, indicating enhanced shareholder value. The gap between reported and adjusted equity narrows slightly over time, which may imply more stable deferred tax impacts on equity.

Net income attributable to shareholders exhibits positive momentum throughout the periods analyzed. The reported net income increased from about $5.1 billion in 2020 to nearly $7.7 billion in 2025, demonstrating solid profitability growth. Adjusted net income, which accounts for deferred tax considerations, follows a similar pattern but shows slight fluctuations, especially a marginal dip around 2023 before resuming growth. This suggests some variability in tax-related adjustments affecting net income but does not significantly alter the overall upward profitability trend.

Overall, the data reveals a financially expanding entity with growing asset and equity bases, accompanied by robust net income performance. Deferred income tax adjustments moderately affect the reported figures but do not substantially distort the evident progressive growth in key financial metrics. The pattern reflects effective asset utilization, controlled liability increases, and consistent profitability improvements over the six-year span analyzed.

Total Assets

Steadily increased from 2020 to 2025, nearly doubling in adjusted terms, indicating substantial asset accumulation and business growth.

Total Liabilities

Gradual upward trend aligned with asset growth, maintaining moderate leverage levels; slight adjustments due to deferred taxes.

Shareholders’ Equity

Consistent increase in both reported and adjusted figures, signifying enhanced shareholder value and retained earnings expansion.

Net Income

Overall growth in profitability with some minor volatility in adjusted net income related to deferred tax effects; strong upward trend evident.

Net Profit Margin

The reported net profit margin exhibited minor fluctuations, starting at 11.52% and peaking at 11.69% before experiencing a gradual decline to 10.72%. It then recovered somewhat, rising back above 11% before dropping slightly to 11.02%. The adjusted net profit margin mirrored this general pattern but showed a more pronounced dip in the middle years, reaching a low of 10.3% before rebounding to a high of 11.53% in the latest period.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios follow a broadly similar trend. Reported turnover declined modestly from 1.20 to 1.17, then increased to 1.30 in 2022 before gradually decreasing to 1.07. Adjusted turnover started higher, at 1.35, increased further to 1.42 before declining steadily to 1.13. This suggests a peak in asset efficiency around 2022, followed by a reduction in subsequent years.

Financial Leverage

The financial leverage ratios show a downward trend initially. The reported leverage decreased from 2.18 to 1.98 by 2024 before increasing again to 2.10. Adjusted financial leverage began at a higher level (2.53), steadily declined to 2.11, then showed a slight uptick at the end to 2.21. Overall, leverage was reduced over this period before partially reversing in the latter years.

Return on Equity (ROE)

Reported ROE was relatively stable initially, growing from 30.05% to 31.11%, then declined significantly over the last three years to 24.61%. Adjusted ROE started higher, at 40.52%, and also declined consistently to 28.83%. The decreasing trend in both reported and adjusted ROE indicates a reduction in profitability relative to shareholder equity over time.

Return on Assets (ROA)

Reported ROA improved initially from 13.78% to 14.55% before declining to 11.74%. Adjusted ROA followed a similar pattern but started at a higher base of 16.03% and decreased more gradually to 13.04%. This suggests that asset profitability reached its peak around 2022, with erosion thereafter.

Overall Observations

The data reveals a cyclical pattern in operational efficiency and profitability, with key metrics peaking around the 2022 fiscal year before experiencing downward trends. Both reported and adjusted figures show that profitability ratios (net profit margin, ROE, and ROA) faced moderate declines after earlier growth, while efficiency as measured by asset turnover also decreased after a high point. Financial leverage was managed downward initially, indicating risk mitigation, but rebounded slightly in more recent periods. Adjusted metrics consistently remain higher than reported ones, reflecting the impact of tax-related and other adjustments on the company’s financial performance measures.

Net Income Trends

The reported net income attributable to the company showed a consistent upward trend over the observed periods, increasing from approximately 5.11 billion USD in 2020 to about 7.68 billion USD in 2025. Adjusted net income also rose steadily, starting at roughly 5.28 billion USD in 2020 and reaching around 8.04 billion USD by 2025, indicating positive growth after accounting for deferred income tax adjustments.

Net Profit Margin Trends

The reported net profit margin exhibited some fluctuations but generally remained within a narrow range, starting at 11.52% in 2020, peaking slightly at 11.69% in 2021, then dipping to 10.72% in 2023 before recovering modestly to 11.02% in 2025. The adjusted net profit margin followed a similar pattern but demonstrated a more pronounced dip in 2023 to 10.3%, recovering thereafter to reach 11.53% in 2025, exceeding the reported measure.

Comparative Analysis of Reported and Adjusted Figures

The adjusted net income values consistently surpassed the reported figures across all periods, reflecting the impact of deferred tax adjustments. The difference between adjusted and reported net income widened in later years, notably in 2025, suggesting increasing influence of these adjustments on financial outcomes. Similarly, the adjusted net profit margin was generally higher than the reported margin by a marginal amount except during certain periods of margin contraction, indicating that the adjustments tend to present a slightly more favorable profitability perspective.

Overall Insights

The data implies consistent growth in net income over the periods analyzed, with both reported and adjusted figures confirming this positive trend. Margins showed resilience despite minor volatility, and the adjustments for deferred income taxes contributed to presenting a more robust profitability profile. The upward trajectory in adjusted net income and margin towards the end of the periods suggests an improving earnings quality when considering tax-related adjustments.

The analysis of the financial data reveals a consistent growth pattern in total assets over the observed periods, both in reported and adjusted figures. Reported total assets increased from approximately 37.1 billion US dollars in 2020 to around 65.4 billion US dollars by 2025, indicating a robust asset base expansion. Similarly, the adjusted total assets followed the same growth trajectory, starting at approximately 32.9 billion US dollars in 2020 and rising to about 61.6 billion US dollars in 2025, reflecting underlying asset value after adjustments for income tax impacts.

Total Assets Growth

The reported total assets show steady growth each year, with the most notable increments occurring between 2024 and 2025. Adjusted total assets exhibit a parallel pattern with a consistent increase across all periods, though the adjusted figures remain below reported totals due to tax-related adjustments.

Total Asset Turnover Trends

Regarding efficiency metrics, reported total asset turnover ratios start at 1.2 in 2020, slightly declining to 1.07 by 2025. This suggests a gradual reduction in revenue generated per unit of asset over time. The adjusted total asset turnover also follows a downward trend from 1.35 in 2020 to 1.13 in 2025, mirroring the reported turnover pattern, albeit with consistently higher ratios, indicative of more efficient asset utilization when tax adjustments are considered.

Comparative Insights

The adjusted metrics consistently present a more favorable view of asset utilization compared to reported data, underscoring the importance of deferred and income tax adjustments in assessing true operational efficiency. The declining turnover ratios over time suggest potential challenges in maintaining revenue growth relative to asset expansion or increasing asset intensity of operations.

Overall Financial Implications

The asset growth combined with decreasing turnover ratios may indicate that while the company is expanding its asset base substantially, the returns generated on these assets are diminishing progressively. This could call for operational reviews to enhance asset productivity or revisiting capital allocation strategies to optimize returns.

Assets

The reported total assets show a consistent upward trend from approximately $37.1 billion in 2020 to about $65.4 billion in 2025, representing significant growth over the six-year span. Adjusted total assets follow a similar pattern, increasing steadily from around $32.9 billion in 2020 to nearly $61.6 billion in 2025. Despite the growth, the adjusted assets are consistently lower than reported assets, reflecting adjustments made for annual reported and deferred income tax effects.

Shareholders' Equity

Reported total shareholders' equity also increases steadily from $17.0 billion in 2020 to $31.2 billion in 2025. Adjusted shareholders' equity exhibits the same upward trajectory but remains consistently lower than the reported figures. It rises from about $13.0 billion in 2020 to approximately $27.9 billion in 2025. This indicates that income tax adjustments reduce equity values but do not impact the positive growth trend.

Financial Leverage

Reported financial leverage ratios start at 2.18 in 2020 and fluctuate slightly, showing a gradual decrease to 1.99 in 2023 and maintaining near 2.0 through 2025. This suggests a modest reduction in the ratio of total assets to shareholders’ equity, indicating improved equity financing relative to assets over time. Adjusted financial leverage ratios are higher throughout the period, beginning at 2.53 in 2020 but declining more notably to 2.15 in 2023 before settling around 2.21 in 2025. The higher leverage in adjusted data reflects the impact of tax-related adjustments on equity, leading to relatively higher asset-to-equity ratios.

Overall Insights

The data reveals strong growth in both assets and equity across the years regardless of the tax adjustments. The adjustments primarily reduce the magnitude of reported figures but do not change the direction of trends. Financial leverage shows a slight improvement over the period, indicating a trend toward increased equity cushion or reduced reliance on debt relative to total assets, especially as the reported figures approach a leverage near 2. The adjusted leverage remains higher but also trends downward, consistent with the equity and asset adjustments for tax.

Net Income Trends

Both reported and adjusted net income attributable to the company exhibit a consistent upward trend over the six-year period. Reported net income increased from approximately 5.11 billion US dollars in 2020 to 7.68 billion in 2025, representing substantial growth. Adjusted net income similarly rose, starting at around 5.28 billion in 2020 and reaching approximately 8.04 billion by 2025. While both metrics increase steadily, the adjusted net income figures tend to be higher than the reported ones, especially in the later years.

Shareholders' Equity Evolution

Reported total shareholders’ equity shows a steady increase from 17 billion US dollars in 2020 to nearly 31.2 billion in 2025. Adjusted shareholders’ equity also follows an upward trajectory, rising from about 13 billion to nearly 27.9 billion in the same period. The adjusted equity values remain below the reported figures throughout, indicating that certain adjustments reduce the equity base when considered.

Return on Equity (ROE) Analysis

Reported ROE starts at around 30.05% in 2020, rising slightly to over 31% in 2022, before experiencing a gradual decline to approximately 24.61% by 2025. The adjusted ROE, initially significantly higher than the reported ROE at 40.52% in 2020, follows a downward trend to 28.83% by 2025. The higher adjusted ROE relative to the reported ROE throughout the period suggests enhanced profitability measures when adjustments are made. However, both measures indicate a declining efficiency in generating returns on equity in the latter years.

Overall Insights

The data reveals strong growth in net income and shareholders’ equity over the measured periods, reflecting overall expansion. Nevertheless, declining ROE figures, especially in more recent years, hint at diminishing returns relative to equity despite income growth. The divergence between reported and adjusted figures highlights the impact of accounting or tax-related adjustments on profitability and capital metrics, with adjusted metrics generally showing higher profitability but lower equity base. These patterns suggest increasing scale but potential pressures on equity efficiency.

Net Income Trends

The reported net income attributable to the company has shown consistent growth over the analyzed periods, rising from approximately $5.11 billion in 2020 to about $7.68 billion in 2025. Similarly, the adjusted net income follows a generally upward trajectory, increasing from roughly $5.28 billion to $8.04 billion. Notably, while both reported and adjusted net income values increased, the adjusted net income exhibits some fluctuations, particularly a slight decline in 2023 compared to 2022 before continuing its growth trend.

Total Assets Trends

The reported total assets have steadily increased from approximately $37.1 billion in 2020 to nearly $65.4 billion in 2025, indicating substantial asset growth over the six-year horizon. Adjusted total assets also show a consistent upward movement, from about $32.9 billion to $61.6 billion. The gap between reported and adjusted total assets appears to widen over time, which may reflect growing adjustments or reclassifications in the asset base.

Return on Assets (ROA) Analysis

Reported ROA has experienced a gradual decline from 13.78% in 2020 to 11.74% in 2025, suggesting that despite growing net income and assets, the efficiency in asset utilization or profitability relative to assets has slightly decreased. Adjusted ROA also trends downward, from 16.03% to 13.04%, though it consistently remains higher than the reported ROA. This differential indicates the adjustments made tend to present a more favorable view of asset efficiency and profitability.

Overall Insights

The company demonstrates positive growth in net income and asset base over the evaluated periods. However, the declining ROA figures, both reported and adjusted, suggest a diminishing return on the company's expanding asset base, potentially highlighting increasing asset investments that have not proportionally translated into higher returns. The persistence of higher adjusted figures relative to reported ones indicates that adjustments, likely related to deferred income tax and other accounting considerations, have a significant impact on the reported financial performance metrics.