Accenture PLC (NYSE:ACN)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows a consistent upward trend over the analyzed period. Beginning at approximately 6.01 billion USD, it increases each year, with a slight dip between the third and fourth years, before reaching its peak at about 9.11 billion USD in the final year. This trend indicates overall growth in operational profitability, despite minor fluctuations.

Cost of Capital

The cost of capital remains relatively stable throughout the period, fluctuating narrowly between 16.64% and 17.15%. This stability suggests that the company was able to maintain its financing costs at a consistent level, which is beneficial for financial planning and investment evaluations.

Invested Capital

Invested capital shows a steady and significant increase over the years. From around 22.85 billion USD, it progressively rises each year, reaching approximately 45.31 billion USD by the end of the period. This marked increase reflects a substantial growth in the company's asset base or capital investments, indicating ongoing expansion or reinvestment strategies.

Economic Profit

Economic profit, representing value creation beyond the cost of capital, presents a different pattern. It initially increases, reaching a peak of about 2.28 billion USD in the second year, before gradually declining over the subsequent years to approximately 1.18 billion USD in the fifth year. However, there is a slight recovery in the final year to around 1.57 billion USD. Despite overall positive economic profit figures, the downward trend after the peak suggests diminishing returns relative to the invested capital and cost of capital, highlighting a potential need to enhance operational efficiency or review investment decisions.

Net Income Attributable to Accenture plc

The net income shows a consistent upward trend over the observed periods. Starting at approximately 5.11 billion USD in 2020, it increased each year, reaching about 7.68 billion USD by 2025. This demonstrates steady profit growth with particularly notable increments between 2021 and 2022, and a sustained increase thereafter, suggesting effective management and operational performance.

Net Operating Profit After Taxes (NOPAT)

NOPAT also exhibits a general positive trend, increasing from about 6.01 billion USD in 2020 to over 9.11 billion USD in 2025. The growth, while mostly steady, includes some fluctuations, such as a slight dip in 2023 compared to 2022. Despite this, the overall pattern points to improved operational efficiency and profitability before dividends and other financial considerations.

General Observations

Both net income and NOPAT have increased significantly over the six-year span. The growth in NOPAT outpaces net income in later years, especially from 2023 to 2025, indicating that the company is generating a higher operating profit relative to its net income. This divergence might highlight changes in non-operating factors, taxes, or other income statement elements affecting net income.

The financial data reveals trends in tax-related expenses and cash operating taxes over a six-year period.

Income Tax Expense

The income tax expense shows an overall upward trajectory from 1,589,018 thousand US dollars in 2020 to an estimated 2,437,993 thousand US dollars in 2025. Notably, there was a significant increase in 2022, rising from approximately 1.77 million to 2.21 million thousand US dollars. After a slight decline in 2023, the expense resumes increasing in the subsequent years. This pattern suggests growth in taxable income or adjustments in tax rates impacting the company's tax obligations.

Cash Operating Taxes

Cash operating taxes also demonstrate a growth trend from 1,440,649 thousand US dollars in 2020 to a peak of about 2,446,374 thousand US dollars in 2022. However, unlike income tax expense, cash operating taxes decrease starting in 2023 and continue to decline through 2025, falling to around 2,085,412 thousand US dollars. This divergence may reflect changes in tax payment timing, tax planning strategies, or fluctuations in operating profitability affecting cash tax payments.

Overall, the data indicates increasing tax expenses with a more volatile pattern in cash operating taxes, which could be indicative of evolving tax liabilities versus actual cash payments, potentially influenced by corporate strategies or external economic factors.

Total Reported Debt & Leases

The total reported debt and leases demonstrated a fluctuating trend over the observed periods. Initially, there was a slight increase from 3,485,513 thousand USD in 2020 to 3,506,634 thousand USD in 2021, followed by a gradual decline in the subsequent years to 3,149,034 thousand USD by 2023. However, a significant increase occurred thereafter, with debt rising sharply to 4,120,549 thousand USD in 2024 and nearly doubling to 8,182,866 thousand USD in 2025. This suggests increased leverage or financing activities particularly in the last two years of the analysis period.

Total Accenture plc Shareholders’ Equity

Shareholders’ equity consistently increased throughout the entire timeframe. The equity value grew steadily from 17,000,536 thousand USD in 2020 to 19,529,454 thousand USD in 2021 and continued this upward trajectory each year, reaching 31,195,446 thousand USD in 2025. This consistent rise indicates a strengthening capital base and potentially retained earnings or equity issuances contributing to shareholder value over time.

Invested Capital

Invested capital showed a clear and sustained upward trend across the periods examined. Starting at 22,846,720 thousand USD in 2020, it increased steadily each year, culminating at 45,311,761 thousand USD in 2025. The growth in invested capital outpaced the growth in shareholders’ equity, reflecting expansion or reinvestment in operational assets, possibly funded by the increased debt observed towards the end of the period.

Economic Profit

The economic profit demonstrates a fluctuating trend over the observed periods. Initially, there is an increase from 2,115,922 thousand USD to a peak of 2,276,655 thousand USD by the second period. This is followed by a decline reaching a low of 1,184,963 thousand USD in the fifth period. Subsequently, there is a modest recovery with economic profit rising to 1,570,165 thousand USD in the last recorded period. Overall, the economic profit shows variability with a downward trend after the peak, before showing signs of improvement toward the end.

Invested Capital

The invested capital exhibits consistent growth throughout the periods analyzed. Starting at 22,846,720 thousand USD, it increases steadily each year, reaching 45,311,761 thousand USD by the last period. This indicates a continuous expansion in the capital employed by the company, nearly doubling over the span of these years.

Economic Spread Ratio

The economic spread ratio, which represents the return over the cost of capital, shows a declining trend from 9.26% initially down to a low of 3.21% in the penultimate period. There is a slight recovery to 3.47% in the final period. This decline suggests that the company’s ability to generate returns above its cost of capital has diminished over time, although the recent uptick may indicate some improvement in economic profitability.

Overall Analysis

The data reveals a pattern where invested capital has expanded substantially while economic profit has experienced volatility with a downward shift before partial recovery. The decreasing economic spread ratio corresponds to this trend, signifying reduced efficiency in generating value above capital costs despite the increasing capital base. This may warrant further investigation into operational performance or capital allocation strategies to enhance value creation in future periods.

Adjusted Revenues

Adjusted revenues show a consistent upward trend over the analyzed periods, increasing from approximately 44.9 billion US dollars in 2020 to over 70.5 billion US dollars projected for 2025. This steady growth indicates strong top-line performance and expansion over time.

Economic Profit

Economic profit exhibits a different pattern. Initially, it rose from about 2.1 billion US dollars in 2020 to a peak near 2.3 billion in 2021. However, it then declined significantly over the next three years, dropping to roughly 1.2 billion by 2024. A partial recovery is projected for 2025, with economic profit increasing to approximately 1.57 billion US dollars. This suggests rising costs or diminishing returns relative to revenue in the intermediate years, followed by some improvement.

Economic Profit Margin

The economic profit margin follows a downward trend consistent with the economic profit figures. Starting at 4.71% in 2020, it steadily decreases year-over-year, reaching a low point of 1.82% in 2024 before recovering slightly to 2.22% in 2025. This decline implies that despite revenue growth, profit generation relative to revenue efficiency weakened notably, with some signs of stabilization near the end of the period.

Insights

While adjusted revenues increase significantly throughout the timeline, economic profit and its margin reveal challenges in converting this revenue growth into proportional economic value. The decline in profit margins suggests increasing costs, lower operational efficiency, or competitive pressures impacting profitability. The slight recovery projected in 2025 may indicate initiatives to improve profit margins or control costs are taking effect, but profit levels remain well below earlier peaks.