Economic Value Added (EVA)
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.
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TJX Cos. Inc. pages available for free this week:
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Enterprise Value (EV)
- Capital Asset Pricing Model (CAPM)
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Economic Profit
TJX Cos. Inc., economic profit calculation
US$ in millions
| 12 months ended: | Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2025-02-01), 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).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial data reveals notable fluctuations and trends in several key performance indicators over the analyzed periods.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT demonstrated a significant decline in the year ending January 30, 2021, dropping from 3,536 million USD to 270 million USD. This sharp decrease was followed by a strong recovery in subsequent years, rising consistently each period to reach 5,082 million USD by February 1, 2025. The general trend from 2021 onwards indicates robust growth in operating profitability.
- Cost of Capital
- The cost of capital exhibited a steady upward trend throughout the periods, increasing from 11.96% in early 2020 to 13.03% in early 2025. This gradual rise implies an increasing hurdle rate for investments, reflecting either rising risk perceptions, market interest rates, or changes in the company's capital structure.
- Invested Capital
- Invested capital showed variability, with an initial increase from 18,717 million USD in early 2020 to 22,428 million USD in early 2021, followed by a reduction to 19,742 million USD in early 2022. After this decline, invested capital resumed growth, reaching 22,612 million USD by early 2025. The fluctuations suggest periods of divestment or optimization followed by renewed investment or expansion.
- Economic Profit
- Economic profit closely mirrored the trends in NOPAT but with more pronounced volatility. After a positive figure of 1,298 million USD in early 2020, it turned negative in early 2021, falling to -2,417 million USD, indicating value destruction during that period. From early 2022 onwards, economic profit improved significantly, reaching 2,136 million USD by early 2025, implying enhanced value creation and operational efficiency post-recovery.
Overall, the data indicates a period of considerable operational challenge around early 2021, followed by strong recovery and growth in profitability and value creation. However, the increasing cost of capital could impose higher requirements for investment returns in the future. The company’s invested capital strategy appears adaptive, with periods of contraction and subsequent expansion that align with the shifts in profitability metrics.
Net Operating Profit after Taxes (NOPAT)
TJX Cos. Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-02-01), 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).
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 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2025 Calculation
Tax benefit of interest expense, excluding capitalized interest = Adjusted interest expense, excluding capitalized interest × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income.
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
The financial data reveals significant fluctuations and an overall upward trajectory in key profitability measures over the analyzed periods.
- Net Income
- Net income shows a sharp decline from 3,272 million US dollars in early 2020 to just 90 million in early 2021, indicating a substantial drop in profitability during that period. However, from 2021 onwards, net income exhibited a strong recovery and consistent growth, rising to 3,283 million in early 2022 and steadily increasing each subsequent year to reach 4,864 million by early 2025.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT follows a similar pattern to net income, with a considerable decrease to 270 million in early 2021 from 3,536 million in early 2020. After this low point, NOPAT experienced a robust rebound and a steady upward trend, increasing to 3,612 million in early 2022 and further climbing to 5,082 million by early 2025.
- Trend Analysis
- Both net income and NOPAT demonstrate a drastic downturn in the 2021 fiscal period, likely reflecting an extraordinary event or disruption impacting profitability. Following this period, both metrics recover strongly and exhibit sustained growth through to 2025, surpassing pre-2021 levels significantly. This recovery and growth suggest improved operational efficiency or favorable business conditions contributing to enhanced financial performance.
Cash Operating Taxes
TJX Cos. Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-02-01), 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).
The analysis of the annual financial data reveals notable fluctuations and an overall upward trend in key tax-related metrics over the observed periods.
- Provision (benefit) for income taxes
- The provision for income taxes displays significant variability across the years. Initially, a positive provision of 1134 million US dollars was observed in early 2020, followed by a sharp decline to a negative amount of 1 million US dollars in early 2021, indicating a tax benefit or reversal during that period. Subsequently, the provision returned to positive values, increasing from 1115 million US dollars in early 2022 to 1138 million in early 2023. The trend continued upward with a marked increase to 1493 million in early 2024 and further to 1619 million in early 2025. This pattern suggests recovery from an anomalous tax benefit year and a strengthening in tax expense recognition thereafter.
- Cash operating taxes
- Cash operating taxes follow a somewhat parallel trend to the provision for income taxes but with less volatility. There was a decline from 1199 million US dollars in early 2020 to 320 million in early 2021, reflecting a considerable reduction in cash tax payments during that year. From early 2021, cash operating taxes increased notably, reaching 1229 million in early 2022, before slightly decreasing to 1128 million in early 2023. A substantial rise is observed in early 2024 and 2025, climbing to 1532 million and 1628 million, respectively. This rising trend indicates increased cash outflows related to tax obligations in the later periods.
Overall, the data depicts a year of unusual tax benefits or adjustments in 2021, followed by steady increases in both tax provisions and cash taxes, culminating in higher tax expenses and payments by 2024 and 2025. This trend may reflect changes in earnings, tax regulations, or strategic tax planning impacting the company's tax-related financial metrics over the period analyzed.
Invested Capital
TJX Cos. Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-02-01), 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).
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.
- Total Reported Debt & Leases
- The total reported debt and leases increased significantly from 11,464 million USD in early 2020 to a peak of 15,503 million USD in early 2021. Following this peak, the debt level decreased notably to 12,507 million USD in early 2022 and then remained relatively stable around the 12,500 to 12,800 million USD range through early 2025.
- Shareholders’ Equity
- Shareholders’ equity exhibited a generally upward trend over the period. Starting at 5,948 million USD in 2020, there was a slight decline by early 2021 to 5,833 million USD, followed by a consistent increase thereafter. By early 2025, equity reached 8,393 million USD, marking a significant growth from the initial value.
- Invested Capital
- Invested capital followed a pattern similar to total debt and leases, rising sharply from 18,717 million USD in 2020 to 22,428 million USD in 2021. Subsequently, it decreased to 19,742 million USD in 2022 and then experienced gradual growth over the following years, reaching 22,612 million USD by 2025. This indicates a period of increased investment around 2021, followed by stabilization and moderate growth.
Cost of Capital
TJX Cos. Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, inclusive of current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-02-01).
1 US$ in millions
2 Equity. See details »
3 Long-term debt, inclusive of current maturities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, inclusive of current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, inclusive of current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, inclusive of current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, inclusive of current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, inclusive of current maturities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
Economic Spread Ratio
TJX Cos. Inc., economic spread ratio calculation, comparison to benchmarks
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
Based on: 10-K (reporting date: 2025-02-01), 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).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
Over the analyzed period, economic profit exhibited notable variability. Initially, there was a positive economic profit of 1,298 million US dollars in the fiscal year ending February 1, 2020. This was followed by a significant decline to a negative economic profit of -2,417 million US dollars as of January 30, 2021, indicating a period of economic loss. Subsequently, economic profit recovered substantially, returning to positive territory at 1,208 million in 2022 and maintaining an upward trend through 2023, 2024, and 2025, reaching 2,136 million by February 1, 2025.
Invested capital generally increased over the period, starting at 18,717 million US dollars in early 2020. It spiked to 22,428 million in early 2021 before experiencing a dip to 19,742 million in 2022. From 2022 onward, the invested capital demonstrated steady growth, rising to 22,612 million US dollars by February 1, 2025. This trend suggests ongoing capital investment and asset accumulation following a period of reduction.
The economic spread ratio mirrored the fluctuations seen in economic profit. It started at a robust 6.93% in 2020, dramatically dropped to -10.78% in 2021, aligning with the negative economic profit during that year. After this low point, the spread ratio recovered to approximately 6.12% in 2022 and gradually improved, reaching 9.45% by 2025. This improvement indicates enhanced returns on invested capital relative to the cost of capital, signaling improved operational efficiency or profitability over time.
- Summary of Trends
- The data reveal a pronounced dip in economic performance in early 2021, reflected in economic profit and economic spread ratio declines. Post-2021, both indicators steadily improved, surpassing initial levels by 2025. Invested capital experienced initial volatility but maintained an overall upward trajectory, supporting growth in economic profit and returns.
Economic Profit Margin
TJX Cos. Inc., economic profit margin calculation, comparison to benchmarks
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | |||||||
| Net sales | |||||||
| Add: Increase (decrease) in deferred gift card revenue | |||||||
| Adjusted net sales | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Amazon.com Inc. | |||||||
| Home Depot Inc. | |||||||
| Lowe’s Cos. Inc. | |||||||
Based on: 10-K (reporting date: 2025-02-01), 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).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net sales
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- Economic profit experienced significant fluctuations over the observed periods. Starting at 1298 million US dollars in 2020, it declined sharply to a negative 2417 million in 2021, indicating a substantial economic loss during that year. Subsequently, economic profit recovered strongly, rising to 1208 million in 2022 and continuing a gradual increase through 2023 and 2024, reaching 2136 million in 2025. This recovery reflects a notable improvement in profitability after the downturn in 2021.
- Adjusted Net Sales
- Adjusted net sales exhibited a generally upward trajectory across the periods, with an exception in 2021. Sales started at 41768 million US dollars in 2020, dropped significantly to 32212 million in 2021, which aligns with the economic profit decline. From 2021 onward, adjusted net sales steadily increased, surpassing previous levels by 2022 with 48659 million and continuing to grow each year through 2025, reaching 56411 million. This pattern suggests a recovery and growth in revenue generation following the 2021 dip.
- Economic Profit Margin
- The economic profit margin mirrors the fluctuations observed in economic profit. Beginning at 3.11% in 2020, it dropped to a negative margin of -7.5% in 2021, consistent with reported losses. From 2022, margins improved steadily, reaching 3.79% by 2025. The increase in margin percentage highlights improved operational efficiency and profitability relative to net sales over time.
- Overall Trend Analysis
- The data reveals a pronounced downturn in financial performance in 2021, characterized by negative economic profit, reduced net sales, and a negative profit margin. However, from 2022 onward, the company exhibited strong recovery and growth across all measured metrics. The continuous improvement in economic profit and margin alongside increasing net sales through 2025 points to a positive and more stable financial outlook.