Accenture PLC (NYSE:ACN)

Over the observed period, net operating profit after taxes (NOPAT) generally increased, although with some fluctuation. Invested capital consistently rose, while the cost of capital remained relatively stable before decreasing in the final year. Consequently, economic profit exhibited a more complex pattern, initially increasing, then declining, and showing a modest recovery in the most recent year.

NOPAT Trend

NOPAT increased from US$6,009,567 thousand in 2020 to US$6,771,649 thousand in 2021, representing a growth of approximately 12.4%. A further increase to US$7,128,082 thousand was observed in 2022. However, NOPAT decreased slightly in 2023 to US$7,011,593 thousand before rebounding to US$7,515,553 thousand in 2024. The most significant increase occurred between 2024 and 2025, with NOPAT reaching US$9,111,886 thousand.

Cost of Capital

The cost of capital remained relatively consistent between 2020 and 2024, fluctuating between 17.29% and 17.39%. A noticeable decrease to 16.88% occurred in 2025, potentially indicating improved financing conditions or a reduced risk profile.

Invested Capital

Invested capital demonstrated a consistent upward trend throughout the period. It increased from US$22,846,720 thousand in 2020 to US$26,216,920 thousand in 2021, US$29,793,146 thousand in 2022, US$33,174,004 thousand in 2023, US$36,963,067 thousand in 2024, and reached US$45,311,761 thousand in 2025. This suggests ongoing investment in the business.

Economic Profit

Economic profit initially increased from US$2,060,147 thousand in 2020 to US$2,212,157 thousand in 2021. It then decreased to US$1,967,933 thousand in 2022 and experienced a more substantial decline to US$1,243,127 thousand in 2023. A further decrease to US$1,094,208 thousand was observed in 2024. However, economic profit recovered somewhat in 2025, rising to US$1,462,782 thousand. The fluctuations in economic profit appear to be influenced by the interplay between NOPAT, invested capital, and the cost of capital.

The decrease in economic profit in 2023 and 2024, despite increasing NOPAT, suggests that the growth in invested capital was outpacing the increase in profitability, and the relatively stable cost of capital contributed to this effect. The recovery in 2025 is likely attributable to the combination of a significant increase in NOPAT and a decrease in the cost of capital, partially offsetting the continued growth in 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.

The economic spread ratio demonstrates a consistent decline over the observed period, although a slight recovery is noted in the most recent year. This trend is coupled with increasing invested capital, while economic profit fluctuates.

Economic Spread Ratio

The economic spread ratio decreased from 9.02% in 2020 to 2.96% in 2023, indicating a diminishing ability to generate returns exceeding the cost of capital. A modest increase to 3.23% is observed in 2025, suggesting a potential stabilization, but remains significantly lower than the levels seen in 2020 and 2021. This decline warrants further investigation into the factors impacting profitability and capital efficiency.

Economic profit initially increased from US$2,060,147 thousand in 2020 to US$2,212,157 thousand in 2021, before decreasing to US$1,243,127 thousand in 2023. A subsequent rise to US$1,462,782 thousand is seen in 2025, but it does not reach the earlier peak. This fluctuation suggests variability in operational performance or changes in the cost of capital.

Invested Capital

Invested capital consistently increased throughout the period, rising from US$22,846,720 thousand in 2020 to US$45,311,761 thousand in 2025. This growth in capital employed, combined with the declining economic spread ratio, indicates that the returns generated from each additional dollar invested are decreasing. The company is deploying more capital, but with diminishing incremental returns.

The combination of rising invested capital and a decreasing economic spread ratio suggests a potential need to evaluate capital allocation strategies and operational efficiencies. While economic profit shows some recovery in the final year, the overall trend indicates a weakening relationship between invested capital and generated economic profit.

The economic profit margin demonstrates a declining trend over the observed period, followed by a modest recovery in the most recent year. While economic profit initially increased, the rate of growth slowed and then reversed, impacting the margin.

Economic Profit Margin Trend

The economic profit margin began at 4.59% in 2020 and decreased consistently through 2023, reaching a low of 1.93%. This indicates that while economic profit remained positive, it grew at a slower pace than adjusted revenues during this period. A slight increase to 2.07% is observed in 2025, suggesting a potential stabilization or modest improvement in profitability relative to revenue.

Economic profit itself exhibited initial growth, increasing from US$2,060,147 thousand in 2020 to US$2,212,157 thousand in 2021. However, it subsequently declined to US$1,243,127 thousand in 2023 before beginning to recover, reaching US$1,462,782 thousand in 2025. This pattern directly influences the economic profit margin.

Revenue Growth vs. Profit Growth

Adjusted revenues consistently increased throughout the period, growing from US$44,900,652 thousand in 2020 to US$70,572,494 thousand in 2025. The decline in the economic profit margin suggests that revenue growth outpaced the growth in economic profit, indicating potential pressures on cost management or pricing power. The recovery in the margin in 2025 coincides with a slightly moderated revenue growth rate compared to prior years.

The period between 2020 and 2023 shows a clear divergence between revenue expansion and economic profit margin contraction. The 2024 and 2025 figures suggest a possible inflection point, but continued monitoring is necessary to confirm a sustained improvement in the economic profit margin.