Accenture PLC (NYSE:ACN)

Current Tax Expense

The current tax expense shows an overall upward trend from 2019 to 2024, starting at approximately 1.50 billion US dollars and increasing to about 2.37 billion US dollars. A slight decline is observed in 2020 compared to 2019, followed by a consistent increase through 2022. Subsequently, the expense stabilizes with minor fluctuations, showing a slight decrease in 2023 but remaining relatively high in 2024.

Deferred Tax Expense (Benefit)

The deferred tax expense exhibits considerable volatility over the examined period. It begins with a benefit (negative value) of around 96 million US dollars in 2019, then shifts to a positive expense in 2020 and 2021, reaching 171 million and 61 million US dollars respectively. Notably, starting from 2022, the figures revert to a tax benefit again, with increasing magnitude in 2023 and a decline in the benefit magnitude in 2024. This pattern reflects fluctuations in temporary differences or tax rate changes impacting deferred tax positions.

Total Income Tax Expense

The total income tax expense increases steadily from 1.41 billion US dollars in 2019 to approximately 2.28 billion US dollars in 2024. Despite the fluctuations in deferred tax expenses, the aggregate income tax expense demonstrates a general upward trajectory, indicating growing tax obligations or taxable income. There is a minor decrease in 2023 before rising again in 2024, suggesting temporary factors influencing the total tax charge.

U.S. federal statutory income tax rate

The rate remained stable at 21% throughout the entire period from 2019 to 2024, indicating no changes in the federal tax policy affecting the company.

U.S. state and local taxes, net

These taxes fluctuated slightly, starting at 1.5% in 2019, rising to a peak of 1.7% in 2020, then generally declining to 0.9% by 2024. The trend shows a modest reduction in state and local tax burden over time.

Non-U.S. operations taxed at other rates

The percentage experienced variability, beginning at 1.1% in 2019, dropping to 0.7% in 2020, then recovering to 1.4% in 2023 before settling at 1% in 2024. This indicates fluctuations in taxation rates applied to non-U.S. operations.

Final determinations

The negative values indicate adjustments that reduce the tax rate, improving from -3.4% in 2019 to -0.9% in 2022, but then slightly increasing in negative impact to -1.2% by 2024. The data suggest a decreasing magnitude of tax benefits from final determinations over the period.

Other net activity in unrecognized tax benefits

This component remained positive and fairly stable, starting at 3.2% in 2019, dipping slightly to 2.4% in 2020, and then maintaining around 2.7% to 3.2% through 2024. This implies consistent recognition of tax benefits previously unrecognized.

Excess tax benefits from share based payments

These values were negative throughout, indicating tax benefits reducing the effective tax rate. The impact intensified from -1.2% in 2019 to a low of -3% in 2022, before becoming less significant at -1% in 2024, showing variability in tax benefits derived from share-based payments.

Foreign-derived intangible income deduction

This deduction first appears in 2021 at -0.9%, growing more significant to -2.3% in 2023, before reducing somewhat to -1.5% in 2024, reflecting increasing but fluctuating utilization of this tax deduction over recent years.

Other, net

Values varied, starting at a minimal 0.3% in 2019, rising to 3.1% in 2022, and then settling around 1.1% to 1.6% in 2023-2024. This denotes variable contributions from miscellaneous tax impacts.

Effective income tax rate

The overall effective income tax rate displayed modest variation, starting at 22.5% in 2019, peaking at 24% in 2022, and stabilizing around 23.4%-23.5% through 2023 and 2024. This indicates relative consistency in the company's actual tax burden despite fluctuations in individual components.

Pensions

The pension-related amounts demonstrate an overall increase in gross values from 2019 through 2024, rising from approximately $447 million to $543 million. However, the related pensions liabilities show increasing negative values starting 2021, reaching a peak negative adjustment of about $205 million in 2023 before slightly improving in 2024. This suggests growing pension obligations or adjustments impacting net pension figures.

Compensation and Benefits

Compensation and benefits expenses exhibit a significant rise from 2019 to 2022, climbing from approximately $624 million to over $930 million. The subsequent years show a decline, with amounts reducing to about $757 million by 2024. This pattern may reflect increased staffing or remuneration costs up to 2022, followed by cost management or workforce optimization.

Share-based Compensation

There is a consistent upward trend in share-based compensation costs over the period, increasing from approximately $292 million in 2019 to roughly $559 million in 2024. This steady rise indicates growing use or valuation of share-based payment schemes.

Tax Credit and Net Operating Loss Carryforwards

Tax credit carryforwards substantially increase over the years, starting at around $528 million in 2019 and more than doubling to approximately $1.48 billion by 2024. Net operating loss carryforwards fluctuate without a clear trend, declining between 2019 and 2020, then again rising significantly in 2024 to nearly $288 million. The increase in tax credit carryforwards suggests utilization or accumulation of tax advantages, potentially reflecting strategic tax planning.

Deferred Amortization Deductions

These deductions exhibit a slight upward movement from 2019 to 2021, peaking near $857 million, followed by a gradual decline to approximately $789 million by 2024. This may indicate amortization efforts stabilizing and then diminishing.

Indirect Effects of Unrecognized Tax Benefits

This category shows some variability but trends upward overall, with fluctuations between $279 million and $400 million. An increase in 2024 may point to growing complexities or uncertainties in tax positions.

Licenses and Other Intangibles

There is a persistent decrease in the value of licenses and other intangible assets from about $1.96 billion in 2019 down to approximately $867 million in 2024. This shrinking asset base suggests ongoing amortization or disposals reducing intangible asset balances.

Leases

Lease-related assets and liabilities manifest distinct movements. Lease assets appear from 2020 onwards, fluctuating between $704 million and $772 million. Lease liabilities are recorded as negative figures, also showing variability but generally around $625 million to $687 million. These figures denote the accounting for lease commitments, with some stability and moderate adjustments over time.

Capitalized Research Costs

Capitalized research costs emerge only in 2023 and 2024, increasing markedly from about $363 million to nearly $668 million, indicating an intensified focus on R&D capitalization in recent years.

Other Assets and Liabilities

Other asset figures show consistent growth from $330 million in 2019 to $859 million in 2024, while corresponding liabilities increase negatively from about $216 million to $734 million over the same period. This expansion implies growth in miscellaneous asset categories alongside rising related obligations.

Deferred Tax Assets and Liabilities

Deferred tax assets steadily increase from roughly $5.46 billion in 2019 to approximately $7.98 billion in 2024. Conversely, valuation allowances also expand in negative terms, escalating from approximately -$607 million to nearly -$1.62 billion. Net deferred tax assets, after valuation allowances, show a moderate increase from around $4.85 billion to $6.36 billion. Deferred tax liabilities deepen in negative value from about -$633 million to -$2.64 billion. Overall, the net deferred tax position experiences slight fluctuations but remains positive, reflecting growing deferred tax benefits alongside increasing tax-related reserves and liabilities.

Investments in Subsidiaries and Intangibles

Investments in subsidiaries display a negative trend, with values decreasing from about -$182 million in 2019 to roughly -$244 million in 2024. Intangible liabilities similarly become more negative, deepening from -$234 million to -$826 million. These patterns indicate increased write-downs or impairments related to subsidiaries and intangible assets, affecting overall asset quality.

Net Deferred Tax Assets (Liabilities)

The net deferred tax assets (liabilities) figures reveal a declining trend from 2019 through 2022, falling from about $4.22 billion to approximately $3.68 billion, followed by minor recovery but stabilization around $3.7 billion in later years. This suggests a general reduction in net deferred tax asset strength despite increases in gross deferred tax items, likely influenced by higher liabilities and valuation allowances.

Deferred tax assets

The value of deferred tax assets shows a declining trend from 2019 to 2022, decreasing from approximately 4.35 billion US dollars to around 4.00 billion. However, from 2022 onwards, the deferred tax assets exhibit a modest recovery, increasing slightly to approximately 4.15 billion in 2023 and maintaining a similar level in 2024 at around 4.15 billion. Overall, the deferred tax assets demonstrate initial erosion followed by stabilization in the latter periods.

Deferred tax liabilities

Deferred tax liabilities present a continuous upward trend throughout the analyzed years. Starting at about 133 million US dollars in 2019, these liabilities more than tripled over the period, reaching approximately 429 million in 2024. This steady increase suggests a growing obligation or recognition of taxable temporary differences over time.

Overall trends and insights

The combination of reducing deferred tax assets until 2022, followed by stabilization, alongside steadily rising deferred tax liabilities, indicates a potential shift in the company's future tax position. The narrowing gap between deferred tax assets and liabilities may impact future tax expenses and cash flows. Monitoring these trends is important, as they reflect changes in timing differences and may denote variations in tax planning strategies or the impact of changes in tax regulations.

The financial data reveals several notable trends over the six-year period from August 31, 2019, to August 31, 2024, for the reported and adjusted accounts of total assets, liabilities, shareholders’ equity, and net income.

Total Assets

Both reported and adjusted total assets show a consistent upward trajectory throughout the period. Reported total assets grew from approximately 29.79 billion USD in 2019 to 55.93 billion USD in 2024, reflecting considerable expansion. Similarly, adjusted total assets increased from about 25.44 billion USD to 51.78 billion USD. The adjusted values remain consistently lower than the reported figures, indicating that deferred income tax adjustments reduce the asset base but maintain the growth trend.

Total Liabilities

Total liabilities, both reported and adjusted, increased steadily but at a slower pace compared to total assets. Reported total liabilities rose from roughly 14.96 billion USD in 2019 to 26.76 billion USD in 2024. Adjusted total liabilities follow a similar pattern, increasing from about 14.83 billion USD to 26.34 billion USD during the same period. The liabilities have a relatively modest growth compared to assets, suggesting an improving asset-to-liability ratio over time.

Shareholders’ Equity

Shareholders' equity experienced significant growth in both reported and adjusted figures. Reported equity increased from roughly 14.41 billion USD in 2019 to 28.29 billion USD in 2024, nearly doubling over the six years. Adjusted equity also rose substantially, from approximately 10.19 billion USD to 24.57 billion USD. The substantial upward trend in shareholders' equity indicates the company’s increasing net worth and retained earnings after accounting for deferred income taxes.

Net Income Attributable to Accenture plc

Net income showed consistent growth with slight fluctuations. Reported net income increased from about 4.78 billion USD in 2019 to 7.26 billion USD in 2024, demonstrating strong profitability growth. Adjusted net income figures, which account for deferred taxes, similarly increased from approximately 4.68 billion USD to 7.17 billion USD. There is a minor variance between reported and adjusted net income each year, indicating that deferred taxes have a small but consistent effect on net earnings.

Overall, the data indicates sustained growth in key financial metrics, with total assets expanding rapidly, liabilities increasing at a slower rate, and shareholders’ equity strengthening considerably. Net income shows steady improvement, supporting the company’s growing financial health. The adjustments for deferred income taxes consistently lower asset, liability, equity, and net income values but do not materially alter the positive trends observed in the reported figures.

The analysis of reported and deferred income tax adjusted financial data reveals several trends spanning the periods from August 2019 through August 2024.

Net Profit Margin

The reported net profit margin demonstrates a generally stable pattern, fluctuating modestly between 10.72% and 11.69%. It peaked in 2021 at 11.69% before experiencing a decline to 10.72% in 2023, followed by a slight recovery to 11.19% in 2024. The adjusted net profit margin shows a similar overall trend but with slightly higher volatility, reaching its highest level of 11.91% in 2020, then declining to its lowest point of 10.3% in 2023 before rebounding to 11.05% in 2024. Overall, margins have experienced minor fluctuations without significant long-term deterioration or improvement.

Total Asset Turnover

Reported total asset turnover illustrates a downward trend from 1.45 in 2019 to 1.16 in 2024, with a mild rebound in 2022 to 1.3. The adjusted total asset turnover follows a comparable trajectory but at consistently higher levels, decreasing from 1.7 in 2019 to 1.25 in 2024, although it also experienced a peak in 2022 at 1.42. This indicates a gradual decline in the efficiency of asset utilization over time, with adjusted figures suggesting somewhat more optimistic performance than reported data.

Financial Leverage

The reported financial leverage exhibits a slow but steady decrease from 2.07 in 2019 to 1.98 in 2024, reflecting a modest de-leveraging trend. Adjusted financial leverage is consistently higher than reported figures, starting at 2.5 in 2019 and decreasing more notably to 2.11 in 2024. This suggests that when accounting adjustments are made, the company’s reliance on debt financing is more pronounced but has also diminished over the assessed period.

Return on Equity (ROE)

A declining trend is evident in both reported and adjusted ROE. Reported ROE drops from a high of 33.17% in 2019 to 25.68% in 2024, indicating a reduction in the company’s profitability relative to shareholder equity. Adjusted ROE starts significantly higher at 45.94% in 2019 but experiences a steady decrease to 29.19% in 2024, showing a more pronounced reduction in profitability after tax adjustments. The gap between reported and adjusted ROE narrows over time, implying converging perceptions of equity returns.

Return on Assets (ROA)

Reported ROA declines from 16.04% in 2019 to 12.99% in 2024, signaling diminishing efficiency in generating earnings from total assets. Adjusted ROA is consistently higher, falling from 18.41% to 13.85% during the same interval. The downward trend in both reported and adjusted figures points to a gradual erosion of asset profitability, although adjustments maintain a relatively more favorable perspective.

In summary, the financial data reveal moderate declines in key profitability and efficiency metrics over the analyzed years. Adjusted figures tend to present a more optimistic outlook compared to reported data, yet both highlight decreasing returns on equity and assets alongside waning asset turnover. Financial leverage shows a gradual reduction, indicating a mild shift towards lower debt dependency. These trends collectively suggest challenges in sustaining prior levels of operational efficiency and profitability, warranting attention to strategic initiatives aimed at reversing these patterns.

The analysis of the financial data over the six-year period reveals several important trends and insights regarding net income and profitability margins.

Net Income Trends

Reported net income attributable to the company increased steadily from 4,779,112 thousand US dollars in 2019 to 7,264,787 thousand US dollars in 2024. This represents a significant growth over the period. Adjusted net income also showed an upward trajectory, rising from 4,682,752 thousand US dollars in 2019 to 7,170,799 thousand US dollars in 2024. Both reported and adjusted net income figures follow a consistent growth pattern, although the adjusted net income values are slightly lower each year, reflecting adjustments likely related to deferred income taxes or other accounting considerations.

Net Profit Margin Analysis

Reported net profit margin exhibited moderate fluctuations during the period, starting at 11.06% in 2019 and reaching 11.19% in 2024. The margin peaked in 2021 at 11.69%, then declined in 2022 and 2023 before slightly recovering in 2024. Similarly, the adjusted net profit margin started at 10.84% in 2019, peaked at 11.91% in 2020, and then showed some volatility, declining to 10.3% in 2023 before increasing again to 11.05% in 2024. The variations in adjusted margins indicate changes in underlying profitability performance, excluding certain accounting adjustments.

Comparison Between Reported and Adjusted Figures

Adjusted net income tends to be marginally lower than reported net income across all years, which is consistent with the application of accounting adjustments. The adjusted net profit margin generally follows a similar trend to the reported margin but demonstrates slightly higher peaks and deeper troughs, suggesting that the adjustments have a notable impact on the profit margin measurements in certain years. The convergence of reported and adjusted net profit margins in 2024 indicates a possible stabilization of the effects of these adjustments.

Total Assets

The reported total assets exhibit a consistent upward trend over the six-year period. Starting at approximately 29.8 billion US dollars in 2019, the assets increase each year, reaching nearly 55.9 billion US dollars by 2024. This indicates sustained growth in asset base. Adjusted total assets, which take into account deferred income tax adjustments, also show a similar rising pattern, growing from about 25.4 billion US dollars in 2019 to around 51.8 billion US dollars in 2024. The adjusted figures are consistently lower than reported figures, reflecting the impact of the tax adjustments.

Total Asset Turnover Ratios

The reported total asset turnover ratio shows a general decline from 1.45 in 2019 to 1.16 in 2024, despite a slight rebound in 2022 when it reached 1.3. This downward trend suggests a decrease in efficiency in generating revenue relative to total assets over time. The adjusted total asset turnover follows a similar but slightly different pattern. It starts higher at 1.7 in 2019 and declines steadily to 1.25 in 2024, with a peak of 1.42 in 2022. Although also decreasing, the adjusted turnover ratios remain consistently higher than the reported ratios, indicating that when deferred income tax adjustments are considered, the efficiency in asset utilization appears stronger than in the unadjusted scenario.

Overall Insights

The increase in both reported and adjusted total assets indicates expansion in the company's asset base. However, the concurrent decline in total asset turnover ratios under both reported and adjusted figures suggests that revenue growth has not kept pace proportionally with asset growth, implying a reduction in asset efficiency over the observed period. The adjusted metrics provide a more favorable view of efficiency, pointing to the importance of considering deferred income tax effects when evaluating operational performance.

Total Assets

The reported total assets demonstrate consistent growth throughout the observed period, increasing from approximately $29.8 billion in 2019 to about $55.9 billion in 2024. Similarly, the adjusted total assets follow the same upward trajectory, rising from around $25.4 billion in 2019 to nearly $51.8 billion in 2024. This indicates an overall expansion in asset base, with the adjusted figures remaining consistently lower than the reported values, reflecting the impact of deferred income tax adjustments.

Shareholders’ Equity

Reported shareholders’ equity shows a steady increase, moving from roughly $14.4 billion in 2019 to $28.3 billion in 2024, signifying strengthened equity capitalization over time. The adjusted shareholders’ equity also increases correspondingly, starting at about $10.2 billion in 2019 and reaching approximately $24.6 billion by 2024. The gap between reported and adjusted equity remains notable but stable, suggesting persistent effects of tax adjustments on equity figures.

Financial Leverage

Reported financial leverage ratios exhibit minor fluctuations but reflect a gradual decline from 2.07 in 2019 to around 1.98 in 2024, implying a modest reduction in leverage and potentially an improved equity buffer relative to debt. Adjusted financial leverage ratios consistently present higher values than reported leverage, starting at 2.5 in 2019 and decreasing to 2.11 by 2024. This trend also indicates a reduction in leverage when accounting for deferred tax adjustments, though adjusted leverage remains elevated relative to the reported measure.

Overall Observations

The data reflects a positive growth trend in both total assets and shareholders’ equity, whether reported or adjusted for deferred income tax. The consistent rise in adjusted and reported figures confirms ongoing expansion with a relatively stable relationship between these metrics. Financial leverage ratios decline gradually, suggesting a slight improvement in the company's capital structure, with adjusted ratios providing a more conservative view of leverage after accounting for tax-related adjustments.

Net Income Trends

Reported net income attributable to the company demonstrated a generally upward trend from 2019 to 2024, increasing from approximately 4.78 billion USD to 7.26 billion USD. The most notable growth occurred between 2020 and 2022, with income rising from roughly 5.11 billion USD to 6.88 billion USD, followed by a stabilization period from 2022 to 2023 and a moderate increase in 2024.

Adjusted net income followed a similar trajectory, steadily increasing from about 4.68 billion USD in 2019 to 7.17 billion USD in 2024. There is a consistent gap between reported and adjusted net income figures, with adjusted figures being slightly lower until 2024, where the difference narrows.

Shareholders’ Equity Trends

Reported total shareholders’ equity exhibited continuous growth over the period, rising from approximately 14.41 billion USD in 2019 to 28.29 billion USD in 2024. The equity nearly doubled over six years, reflecting strong capital base expansion.

Adjusted total shareholders’ equity showed a consistent upward trend as well, increasing from about 10.19 billion USD in 2019 to 24.57 billion USD in 2024. The growth pattern mirrors that of the reported equity, but at consistently lower values throughout the period.

Return on Equity (ROE) Analysis

Reported ROE declined over time from 33.17% in 2019 to 25.68% in 2024. The most significant reduction occurred between 2022 and 2023, suggesting a relative decrease in profitability on reported equity, despite increasing net income and shareholders’ equity.

Adjusted ROE also showed a downward trend, starting at a significantly higher rate of 45.94% in 2019 and falling to 29.19% in 2024. This decline indicates diminishing efficiency in generating profits from adjusted equity, although adjusted ROE remained consistently above reported ROE across all years.

Overall Observations

The data indicates that the company has experienced steady growth in net income and shareholders’ equity over the six-year period. However, both reported and adjusted ROE have declined, which may suggest that while the absolute profitability and equity base have grown, the return efficiency on equity has decreased.

The consistent gap between reported and adjusted figures reflects the impact of income tax adjustments and related accounting treatments, with adjusted metrics generally presenting a more conservative perspective on income and equity.

The analysis of the financial data over the six-year period reveals distinct trends in income, asset base, and returns on assets (ROA), both reported and adjusted for deferred income tax.

Net Income Trends

Reported net income attributable to the entity shows a consistent upward trajectory, increasing from approximately $4.78 billion in 2019 to about $7.26 billion in 2024. Adjusted net income, which presumably accounts for deferred income tax effects, follows a similar pattern, rising from about $4.68 billion in 2019 to approximately $7.17 billion in 2024. Notably, adjusted net income exceeds reported net income in the years 2020 and 2021, suggesting adjustments had a positive impact on net income during those periods. However, from 2022 onwards, reported net income slightly surpasses adjusted net income.

Total Assets

Reported total assets have shown steady growth from roughly $29.79 billion in 2019 to $55.93 billion in 2024, nearly doubling over the six years. The adjusted total assets, accounting for deferred tax adjustments, are consistently lower than reported assets but mirror the same growth pattern, rising from about $25.44 billion to $51.78 billion. The gap between reported and adjusted total assets remains relatively stable, indicating consistent deferred tax impacts on asset valuation.

Return on Assets (ROA)

Reported ROA declines gradually over the period, starting at 16.04% in 2019 and falling to 12.99% in 2024. This decline may reflect the increasing asset base growing faster than net income or differing accounting impacts. Adjusted ROA also declines but remains higher than reported ROA throughout the period, beginning at 18.41% in 2019 and decreasing to 13.85% in 2024. The narrowing difference between reported and adjusted ROA over time suggests a diminishing impact of deferred tax adjustments on profitability metrics relative to assets.

Insights

The consistent rise in net income and total assets indicates growth and expansion. The discrepancy between reported and adjusted figures highlights the material impact of deferred income tax accounting on financial performance and position. While net income adjustments fluctuate relative to reported income, the asset adjustments remain proportionally consistent. The decreasing ROA values, despite income growth, signal that asset growth is slightly outpacing income growth, leading to a compression of profitability ratios. This trend is important for assessing operational efficiency and capital utilization over time.