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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

TJX Cos. Inc., economic profit calculation

US$ in millions

12 months ended:	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019
Net operating profit after taxes (NOPAT)¹	4,636)	3,803)	3,612)	270)	3,536)	3,199)
Cost of capital²	11.54%	11.25%	10.98%	10.81%	10.79%	11.00%
Invested capital³	21,125)	20,404)	19,742)	22,428)	18,717)	17,411)

Economic profit⁴	2,199)	1,507)	1,445)	(2,154)	1,517)	1,284)

Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 4,636 – 11.54% × 21,125 = 2,199

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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.	TJX Cos. Inc. economic profit increased from 2022 to 2023 and from 2023 to 2024.

TJX Cos. Inc., NOPAT calculation

US$ in millions

12 months ended:	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019
Net income	4,474)	3,498)	3,283)	90)	3,272)	3,060)
Deferred income tax expense (benefit)¹	(8)	64)	(44)	(232)	(6)	(88)
Increase (decrease) in deferred gift card revenue²	52)	36)	109)	75)	51)	44)
Increase (decrease) in equity equivalents³	44)	100)	65)	(157)	44)	(44)
Interest expense, excluding capitalized interest	79)	84)	120)	194)	59)	65)
Interest expense, operating lease liability⁴	319)	253)	220)	245)	268)	223)
Adjusted interest expense, excluding capitalized interest	398)	337)	339)	439)	327)	288)
Tax benefit of interest expense, excluding capitalized interest⁵	(84)	(71)	(71)	(92)	(69)	(61)
Adjusted interest expense, excluding capitalized interest, after taxes⁶	315)	267)	268)	346)	258)	228)
Interest income	(249)	(78)	(4)	(13)	(49)	(56)
Investment income, before taxes	(249)	(78)	(4)	(13)	(49)	(56)
Tax expense (benefit) of investment income⁷	52)	16)	1)	3)	10)	12)
Investment income, after taxes⁸	(197)	(62)	(4)	(10)	(39)	(44)
Net operating profit after taxes (NOPAT)	4,636)	3,803)	3,612)	270)	3,536)	3,199)

Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in deferred gift card revenue.

³ Addition of increase (decrease) in equity equivalents to net income.

⁴ 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 9,680 × 3.30% = 319

⁵ 2024 Calculation
Tax benefit of interest expense, excluding capitalized interest = Adjusted interest expense, excluding capitalized interest × Statutory income tax rate
= 398 × 21.00% = 84

⁶ Addition of after taxes interest expense to net income.

⁷ 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 249 × 21.00% = 52

⁸ Elimination of after taxes investment income.

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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.	TJX Cos. Inc. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

TJX Cos. Inc., cash operating taxes calculation

US$ in millions

12 months ended:	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019
Provision (benefit) for income taxes	1,493)	1,138)	1,115)	(1)	1,134)	1,113)
Less: Deferred income tax expense (benefit)	(8)	64)	(44)	(232)	(6)	(88)
Add: Tax savings from interest expense, excluding capitalized interest	84)	71)	71)	92)	69)	61)
Less: Tax imposed on investment income	52)	16)	1)	3)	10)	12)
Cash operating taxes	1,532)	1,128)	1,229)	320)	1,199)	1,250)

Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02).

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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.	TJX Cos. Inc. cash operating taxes decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

TJX Cos. Inc., invested capital calculation (financing approach)

US$ in millions

	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019
Current portion of long-term debt	—)	500)	—)	750)	—)	—)
Long-term debt, excluding current portion	2,862)	2,859)	3,355)	5,333)	2,237)	2,234)
Operating lease liability¹	9,680)	9,385)	9,152)	9,421)	9,228)	8,896)
Total reported debt & leases	12,542)	12,744)	12,507)	15,503)	11,464)	11,130)
Shareholders’ equity	7,302)	6,364)	6,003)	5,833)	5,948)	5,049)
Net deferred tax (assets) liabilities²	(24)	(31)	(141)	(90)	130)	152)
Deferred gift card revenue³	773)	721)	685)	576)	501)	450)
Equity equivalents⁴	749)	690)	544)	486)	631)	602)
Accumulated other comprehensive (income) loss, net of tax⁵	532)	606)	687)	606)	673)	630)
Adjusted shareholders’ equity	8,583)	7,660)	7,235)	6,925)	7,252)	6,281)
Invested capital	21,125)	20,404)	19,742)	22,428)	18,717)	17,411)

Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of deferred gift card revenue.

⁴ Addition of equity equivalents to shareholders’ equity.

⁵ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	TJX Cos. Inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

TJX Cos. Inc., cost of capital calculations

Feb 3, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	110,216)	110,216)	÷	122,526)	=	0.90	0.90	×	12.55%	=	11.29%
Long-term debt, inclusive of current maturities³	2,630)	2,630)	÷	122,526)	=	0.02	0.02	×	2.56% × (1 – 21.00%)	=	0.04%
Operating lease liability⁴	9,680)	9,680)	÷	122,526)	=	0.08	0.08	×	3.30% × (1 – 21.00%)	=	0.21%
Total:	122,526)					1.00					11.54%

Based on: 10-K (reporting date: 2024-02-03).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, inclusive of current maturities. See details »

⁴ Operating lease liability. See details »

Jan 28, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	88,229)	88,229)	÷	100,728)	=	0.88	0.88	×	12.55%	=	10.99%
Long-term debt, inclusive of current maturities³	3,114)	3,114)	÷	100,728)	=	0.03	0.03	×	2.55% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	9,385)	9,385)	÷	100,728)	=	0.09	0.09	×	2.70% × (1 – 21.00%)	=	0.20%
Total:	100,728)					1.00					11.25%

Based on: 10-K (reporting date: 2023-01-28).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, inclusive of current maturities. See details »

⁴ Operating lease liability. See details »

Jan 29, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	72,864)	72,864)	÷	85,516)	=	0.85	0.85	×	12.55%	=	10.69%
Long-term debt, inclusive of current maturities³	3,500)	3,500)	÷	85,516)	=	0.04	0.04	×	2.55% × (1 – 21.00%)	=	0.08%
Operating lease liability⁴	9,152)	9,152)	÷	85,516)	=	0.11	0.11	×	2.40% × (1 – 21.00%)	=	0.20%
Total:	85,516)					1.00					10.98%

Based on: 10-K (reporting date: 2022-01-29).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, inclusive of current maturities. See details »

⁴ Operating lease liability. See details »

Jan 30, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	79,775)	79,775)	÷	95,850)	=	0.83	0.83	×	12.55%	=	10.44%
Long-term debt, inclusive of current maturities³	6,654)	6,654)	÷	95,850)	=	0.07	0.07	×	2.94% × (1 – 21.00%)	=	0.16%
Operating lease liability⁴	9,421)	9,421)	÷	95,850)	=	0.10	0.10	×	2.60% × (1 – 21.00%)	=	0.20%
Total:	95,850)					1.00					10.81%

Based on: 10-K (reporting date: 2021-01-30).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, inclusive of current maturities. See details »

⁴ Operating lease liability. See details »

Feb 1, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	56,052)	56,052)	÷	67,580)	=	0.83	0.83	×	12.55%	=	10.41%
Long-term debt, inclusive of current maturities³	2,300)	2,300)	÷	67,580)	=	0.03	0.03	×	2.51% × (1 – 21.00%)	=	0.07%
Operating lease liability⁴	9,228)	9,228)	÷	67,580)	=	0.14	0.14	×	2.90% × (1 – 21.00%)	=	0.31%
Total:	67,580)					1.00					10.79%

Based on: 10-K (reporting date: 2020-02-01).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, inclusive of current maturities. See details »

⁴ Operating lease liability. See details »

Feb 2, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	64,580)	64,580)	÷	75,646)	=	0.85	0.85	×	12.55%	=	10.71%
Long-term debt, inclusive of current maturities³	2,170)	2,170)	÷	75,646)	=	0.03	0.03	×	2.51% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	8,896)	8,896)	÷	75,646)	=	0.12	0.12	×	2.51% × (1 – 21.00%)	=	0.23%
Total:	75,646)					1.00					11.00%

Based on: 10-K (reporting date: 2019-02-02).

¹ US$ in millions

² Equity. See details »

³ Long-term debt, inclusive of current maturities. See details »

⁴ Operating lease liability. See details »

TJX Cos. Inc., economic spread ratio calculation, comparison to benchmarks

	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	2,199)	1,507)	1,445)	(2,154)	1,517)	1,284)
Invested capital²	21,125)	20,404)	19,742)	22,428)	18,717)	17,411)
Performance Ratio
Economic spread ratio³	10.41%	7.39%	7.32%	-9.60%	8.10%	7.37%
Benchmarks
Economic Spread Ratio, Competitors⁴
Amazon.com Inc.	—	-4.37%	-15.63%	4.44%	1.80%	-1.54%
Home Depot Inc.	16.95%	20.90%	25.39%	16.22%	23.31%	23.74%
Lowe’s Cos. Inc.	21.52%	16.40%	24.62%	12.11%	8.23%	-1.30%

Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,199 ÷ 21,125 = 10.41%

⁴ Click competitor name to see calculations.

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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.	TJX Cos. Inc. economic spread ratio improved from 2022 to 2023 and from 2023 to 2024.

TJX Cos. Inc., economic profit margin calculation, comparison to benchmarks

	Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020	Feb 2, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	2,199)	1,507)	1,445)	(2,154)	1,517)	1,284)

Net sales	54,217)	49,936)	48,550)	32,137)	41,717)	38,973)
Add: Increase (decrease) in deferred gift card revenue	52)	36)	109)	75)	51)	44)
Adjusted net sales	54,269)	49,972)	48,659)	32,212)	41,768)	39,017)
Performance Ratio
Economic profit margin²	4.05%	3.02%	2.97%	-6.69%	3.63%	3.29%
Benchmarks
Economic Profit Margin, Competitors³
Amazon.com Inc.	—	-2.46%	-8.16%	1.91%	0.70%	-0.70%
Home Depot Inc.	6.22%	7.34%	8.07%	6.10%	7.73%	7.50%
Lowe’s Cos. Inc.	6.47%	4.19%	6.70%	3.84%	3.05%	-0.45%

Based on: 10-K (reporting date: 2024-02-03), 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × 2,199 ÷ 54,269 = 4.05%

³ Click competitor name to see calculations.

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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.	TJX Cos. Inc. economic profit margin improved from 2022 to 2023 and from 2023 to 2024.

TJX Cos. Inc. (NYSE:TJX)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin