EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Economic Profit
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2022 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 297,371 – 17.01% × 1,478,485 = 45,909
Item | Description | The company |
---|---|---|
Economic profit | Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. | Paycom Software Inc. economic profit increased from 2020 to 2021 and from 2021 to 2022. |
Net Operating Profit after Taxes (NOPAT)
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in deferred revenue.
3 Addition of increase (decrease) in equity equivalents to net income.
4 2022 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 41,012 × 3.70% = 1,517
5 2022 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 4,053 × 21.00% = 851
6 Addition of after taxes interest expense to net income.
Item | Description | The company |
---|---|---|
NOPAT | Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. | Paycom Software Inc. NOPAT increased from 2020 to 2021 and from 2021 to 2022. |
Cash Operating Taxes
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
Item | Description | The company |
---|---|---|
Cash operating taxes | Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. | Paycom Software Inc. cash operating taxes increased from 2020 to 2021 and from 2021 to 2022. |
Invested Capital
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of deferred revenue.
4 Addition of equity equivalents to stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
Item | Description | The company |
---|---|---|
Invested capital | Capital is an approximation of the economic book value of all cash invested in going-concern business activities. | Paycom Software Inc. invested capital increased from 2020 to 2021 and from 2021 to 2022. |
Cost of Capital
Paycom Software Inc., cost of capital calculations
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 17,792,735) | 17,792,735) | ÷ | 17,862,747) | = | 1.00 | 1.00 | × | 17.06% | = | 17.00% | ||
Long-term debt3 | 29,000) | 29,000) | ÷ | 17,862,747) | = | 0.00 | 0.00 | × | 3.70% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 41,012) | 41,012) | ÷ | 17,862,747) | = | 0.00 | 0.00 | × | 3.70% × (1 – 21.00%) | = | 0.01% | ||
Total: | 17,862,747) | 1.00 | 17.01% |
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 19,012,528) | 19,012,528) | ÷ | 19,072,595) | = | 1.00 | 1.00 | × | 17.06% | = | 17.01% | ||
Long-term debt3 | 29,155) | 29,155) | ÷ | 19,072,595) | = | 0.00 | 0.00 | × | 3.30% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 30,912) | 30,912) | ÷ | 19,072,595) | = | 0.00 | 0.00 | × | 3.30% × (1 – 21.00%) | = | 0.00% | ||
Total: | 19,072,595) | 1.00 | 17.02% |
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 23,185,491) | 23,185,491) | ÷ | 23,244,281) | = | 1.00 | 1.00 | × | 17.06% | = | 17.02% | ||
Long-term debt3 | 30,894) | 30,894) | ÷ | 23,244,281) | = | 0.00 | 0.00 | × | 3.30% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 27,896) | 27,896) | ÷ | 23,244,281) | = | 0.00 | 0.00 | × | 3.30% × (1 – 21.00%) | = | 0.00% | ||
Total: | 23,244,281) | 1.00 | 17.03% |
Based on: 10-K (reporting date: 2020-12-31).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 17,488,062) | 17,488,062) | ÷ | 17,549,380) | = | 1.00 | 1.00 | × | 17.06% | = | 17.00% | ||
Long-term debt3 | 32,633) | 32,633) | ÷ | 17,549,380) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
Operating lease liability4 | 28,685) | 28,685) | ÷ | 17,549,380) | = | 0.00 | 0.00 | × | 3.90% × (1 – 21.00%) | = | 0.01% | ||
Total: | 17,549,380) | 1.00 | 17.01% |
Based on: 10-K (reporting date: 2019-12-31).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt. See details »
4 Operating lease liability. See details »
Capital (fair value)1 | Weights | Cost of capital | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Equity2 | 10,217,070) | 10,217,070) | ÷ | 10,278,658) | = | 0.99 | 0.99 | × | 17.06% | = | 16.96% | ||
Long-term debt3 | 34,389) | 34,389) | ÷ | 10,278,658) | = | 0.00 | 0.00 | × | 1.50% × (1 – 21.00%) | = | 0.00% | ||
Operating lease liability4 | 27,199) | 27,199) | ÷ | 10,278,658) | = | 0.00 | 0.00 | × | 1.50% × (1 – 21.00%) | = | 0.00% | ||
Total: | 10,278,658) | 1.00 | 16.97% |
Based on: 10-K (reporting date: 2018-12-31).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2022 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 45,909 ÷ 1,478,485 = 3.11%
Performance ratio | Description | The company |
---|---|---|
Economic spread ratio | The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. | Paycom Software Inc. economic spread ratio improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Economic Profit Margin
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Economic profit. See details »
2 2022 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 45,909 ÷ 1,391,208 = 3.30%
Performance ratio | Description | The company |
---|---|---|
Economic profit margin | The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. | Paycom Software Inc. economic profit margin improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |