Accenture PLC (NYSE:ACN)

Net operating profit after taxes (NOPAT)

The net operating profit after taxes exhibits a generally upward trend over the six-year period from 2020 to 2025. It starts at approximately 6.0 billion USD in 2020 and increases steadily each year with minor fluctuations, reaching 9.1 billion USD in 2025. This reflects an overall improved operational profitability during the period, particularly notable in the jumps observed between 2024 and 2025.

Cost of capital

The cost of capital remains relatively stable throughout the period, fluctuating slightly around a level close to 17%. The cost is highest at 17.1% in 2021 and 2023, slightly decreases in subsequent years, and reaches its lowest point at 16.6% in 2025. The stability of the cost of capital suggests a consistent risk and return expectation for the company’s invested capital.

Invested capital

Invested capital shows a clear and significant upward trajectory, increasing from approximately 22.8 billion USD in 2020 to 45.3 billion USD in 2025. This growth indicates ongoing substantial investments or capital expenditures, more than doubling over the five-year span. The steady increase implies that the company is expanding its asset base or operations.

Economic profit

Economic profit displays a more volatile pattern despite the growth in NOPAT. Starting at about 2.1 billion USD in 2020, it peaks slightly in 2021 and then experiences a downward trend until 2024, with the lowest point at approximately 1.2 billion USD. There is a recovery in 2025, where economic profit increases to about 1.6 billion USD. This decline followed by partial recovery indicates that while operating profits increased, the costs related to invested capital have impacted the economic value generated by the company, particularly in years 2022 to 2024.

Overall assessment

The data suggest a company that is successfully growing its operating profit and continuously investing in its asset base. However, the economic profit trend indicates some challenges in maximizing value beyond the return required by capital providers, especially during the middle years. The stability of the cost of capital provides a consistent benchmark, and the partial rebound in economic profit in 2025 suggests an improvement in capital efficiency or profitability relative to invested capital.

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 demonstrated fluctuations over the six-year period. Starting at approximately 2.13 billion US dollars in 2020, it peaked in 2021 at around 2.29 billion before experiencing a decline in the subsequent years. The figure reached its lowest point in 2024 at about 1.20 billion, followed by a moderate recovery in 2025 to nearly 1.59 billion. This trend suggests variability in the company's value creation abilities, with a notable dip particularly after 2021.

Invested capital

Invested capital exhibited a consistent upward trajectory throughout the timeframe. Beginning at approximately 22.85 billion US dollars in 2020, it steadily increased each year, reaching over 45.31 billion by 2025. This trend indicates substantial growth in the company's capital base, potentially reflecting ongoing investments and asset accumulation.

Economic spread ratio

The economic spread ratio declined progressively from 9.31% in 2020 to 3.25% in 2024, before showing a slight improvement to 3.51% in 2025. This downward movement over the majority of the period highlights a diminishing return on invested capital relative to the cost of capital, suggesting reduced efficiency or profitability in the utilization of capital. The slight uptick in the final year may indicate early signs of recovery in economic performance.

Overall analysis

The combination of increasing invested capital with decreasing economic spread ratio and fluctuating economic profit points to a scenario where the company has been expanding its capital base but facing challenges in generating corresponding levels of economic profit proportionally. The declining economic spread ratio emphasizes potential pressure on profit margins or increased costs associated with the investments. Nevertheless, the rebound in economic profit and economic spread ratio in the most recent year could signify initial improvements in capital efficiency and profitability.

Economic Profit

The economic profit shows a declining trend from 2020 to 2024, decreasing from approximately 2.13 billion US dollars in 2020 to around 1.20 billion US dollars in 2024. However, there is a notable recovery in 2025, with economic profit increasing to about 1.59 billion US dollars. This pattern indicates a phase of reduced profitability followed by a partial rebound in the latest period.

Adjusted Revenues

Adjusted revenues have exhibited consistent growth throughout the observed period. Starting at approximately 44.9 billion US dollars in 2020, revenues steadily increased each year, reaching nearly 70.6 billion US dollars by 2025. This indicates strong revenue expansion despite fluctuations in economic profit.

Economic Profit Margin

The economic profit margin, expressed as a percentage, has experienced a downward trend from 4.74% in 2020 to a low of 1.84% in 2024. There is a slight improvement in 2025, with the margin rising to 2.25%. The declining margin through most periods suggests decreasing profitability efficiency relative to revenue, although the recent increase may suggest the beginning of margin recovery.

Overall Observations

The data reveals a contrast between growing revenues and decreasing economic profit and profit margins up to 2024, implying that although the company has expanded its revenue base, it faced challenges in maintaining proportional profitability. The improvement in 2025 economic profit and margin may indicate operational or cost management improvements or other factors contributing to enhanced profitability after a period of decline.