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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

e.l.f. Beauty, Inc., economic profit calculation

US$ in thousands

12 months ended:	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Net operating profit after taxes (NOPAT)¹	132,182)	57,046)	20,327)	618)	26,428)
Cost of capital²	18.76%	18.93%	17.70%	17.60%	16.56%
Invested capital³	936,268)	496,463)	439,123)	434,062)	418,026)

Economic profit⁴	(43,508)	(36,939)	(57,389)	(75,760)	(42,810)

Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).

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
= 132,182 – 18.76% × 936,268 = -43,508

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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.	e.l.f. Beauty, Inc. economic profit increased from 2022 to 2023 but then slightly decreased from 2023 to 2024.

e.l.f. Beauty, Inc., NOPAT calculation

US$ in thousands

12 months ended:	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Net income	127,663)	61,530)	21,770)	6,232)	17,884)
Deferred income tax expense (benefit)¹	(3,276)	(6,401)	(3,701)	(8,584)	2,443)
Increase (decrease) in allowance for doubtful accounts²	1,100)	—)	(100)	(800)	700)
Increase (decrease) in equity equivalents³	(2,176)	(6,401)	(3,801)	(9,384)	3,143)
Interest expense	11,840)	3,990)	2,444)	4,095)	7,170)
Interest expense, operating lease liability⁴	1,452)	408)	544)	683)	530)
Adjusted interest expense	13,292)	4,398)	2,988)	4,778)	7,700)
Tax benefit of interest expense⁵	(2,791)	(924)	(627)	(1,003)	(1,617)
Adjusted interest expense, after taxes⁶	10,501)	3,475)	2,360)	3,774)	6,083)
Interest income	(4,817)	(1,972)	(3)	(5)	(863)
Investment income, before taxes	(4,817)	(1,972)	(3)	(5)	(863)
Tax expense (benefit) of investment income⁷	1,012)	414)	1)	1)	181)
Investment income, after taxes⁸	(3,805)	(1,558)	(2)	(4)	(682)
Net operating profit after taxes (NOPAT)	132,182)	57,046)	20,327)	618)	26,428)

Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

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
= 28,475 × 5.10% = 1,452

⁵ 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 13,292 × 21.00% = 2,791

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
= 4,817 × 21.00% = 1,012

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.	e.l.f. Beauty, Inc. NOPAT increased from 2022 to 2023 and from 2023 to 2024.

e.l.f. Beauty, Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Provision (benefit) for income taxes	13,327)	2,544)	3,661)	(2,542)	6,185)
Less: Deferred income tax expense (benefit)	(3,276)	(6,401)	(3,701)	(8,584)	2,443)
Add: Tax savings from interest expense	2,791)	924)	627)	1,003)	1,617)
Less: Tax imposed on investment income	1,012)	414)	1)	1)	181)
Cash operating taxes	18,383)	9,455)	7,989)	7,044)	5,178)

Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).

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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.	e.l.f. Beauty, Inc. cash operating taxes increased from 2022 to 2023 and from 2023 to 2024.

e.l.f. Beauty, Inc., invested capital calculation (financing approach)

US$ in thousands

	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Current portion of long-term debt and finance lease obligations	100,307)	5,575)	5,786)	16,281)	12,568)
Long-term debt and finance lease obligations	161,819)	60,881)	91,080)	110,255)	126,088)
Operating lease liability¹	28,475)	15,711)	20,135)	24,376)	14,322)
Total reported debt & leases	290,601)	82,167)	117,001)	150,912)	152,978)
Stockholders’ equity	642,572)	411,017)	312,429)	269,646)	242,171)
Net deferred tax (assets) liabilities²	1,845)	3,179)	9,593)	13,304)	21,877)
Allowance for doubtful accounts³	1,200)	100)	100)	200)	1,000)
Equity equivalents⁴	3,045)	3,279)	9,693)	13,504)	22,877)
Accumulated other comprehensive (income) loss, net of tax⁵	50)	—)	—)	—)	—)
Adjusted stockholders’ equity	645,667)	414,296)	322,122)	283,150)	265,048)
Invested capital	936,268)	496,463)	439,123)	434,062)	418,026)

Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).

¹ Addition of capitalized operating leases.

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

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of equity equivalents to stockholders’ 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.	e.l.f. Beauty, Inc. invested capital increased from 2022 to 2023 and from 2023 to 2024.

e.l.f. Beauty, Inc., cost of capital calculations

Mar 31, 2024

	Capital (fair value)¹	Weights					Cost of capital
Equity²	10,335,864)	10,335,864)	÷	10,627,271)	=	0.97	0.97	×	19.15%	=	18.62%
Long-term debt, including current portion³	262,932)	262,932)	÷	10,627,271)	=	0.02	0.02	×	6.83% × (1 – 21.00%)	=	0.13%
Operating lease liability⁴	28,475)	28,475)	÷	10,627,271)	=	0.00	0.00	×	5.10% × (1 – 21.00%)	=	0.01%
Total:	10,627,271)					1.00					18.76%

Based on: 10-K (reporting date: 2024-03-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt, including current portion. See details »

⁴ Operating lease liability. See details »

Mar 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	5,610,256)	5,610,256)	÷	5,692,850)	=	0.99	0.99	×	19.15%	=	18.87%
Long-term debt, including current portion³	66,883)	66,883)	÷	5,692,850)	=	0.01	0.01	×	6.17% × (1 – 21.00%)	=	0.06%
Operating lease liability⁴	15,711)	15,711)	÷	5,692,850)	=	0.00	0.00	×	2.60% × (1 – 21.00%)	=	0.01%
Total:	5,692,850)					1.00					18.93%

Based on: 10-K (reporting date: 2023-03-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt, including current portion. See details »

⁴ Operating lease liability. See details »

Mar 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,287,478)	1,287,478)	÷	1,405,282)	=	0.92	0.92	×	19.15%	=	17.54%
Long-term debt, including current portion³	97,669)	97,669)	÷	1,405,282)	=	0.07	0.07	×	2.31% × (1 – 21.00%)	=	0.13%
Operating lease liability⁴	20,135)	20,135)	÷	1,405,282)	=	0.01	0.01	×	2.70% × (1 – 21.00%)	=	0.03%
Total:	1,405,282)					1.00					17.70%

Based on: 10-K (reporting date: 2022-03-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt, including current portion. See details »

⁴ Operating lease liability. See details »

Mar 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	1,473,056)	1,473,056)	÷	1,624,221)	=	0.91	0.91	×	19.15%	=	17.36%
Long-term debt, including current portion³	126,789)	126,789)	÷	1,624,221)	=	0.08	0.08	×	3.23% × (1 – 21.00%)	=	0.20%
Operating lease liability⁴	24,376)	24,376)	÷	1,624,221)	=	0.02	0.02	×	2.80% × (1 – 21.00%)	=	0.03%
Total:	1,624,221)					1.00					17.60%

Based on: 10-K (reporting date: 2021-03-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt, including current portion. See details »

⁴ Operating lease liability. See details »

Mar 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	828,650)	828,650)	÷	981,837)	=	0.84	0.84	×	19.15%	=	16.16%
Long-term debt, including current portion³	138,865)	138,865)	÷	981,837)	=	0.14	0.14	×	3.24% × (1 – 21.00%)	=	0.36%
Operating lease liability⁴	14,322)	14,322)	÷	981,837)	=	0.01	0.01	×	3.70% × (1 – 21.00%)	=	0.04%
Total:	981,837)					1.00					16.56%

Based on: 10-K (reporting date: 2020-03-31).

¹ US$ in thousands

² Equity. See details »

³ Long-term debt, including current portion. See details »

⁴ Operating lease liability. See details »

e.l.f. Beauty, Inc., economic spread ratio calculation, comparison to benchmarks

	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	(43,508)	(36,939)	(57,389)	(75,760)	(42,810)
Invested capital²	936,268)	496,463)	439,123)	434,062)	418,026)
Performance Ratio
Economic spread ratio³	-4.65%	-7.44%	-13.07%	-17.45%	-10.24%
Benchmarks
Economic Spread Ratio, Competitors⁴
Procter & Gamble Co.	7.98%	7.78%	8.18%	7.75%	5.43%

Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -43,508 ÷ 936,268 = -4.65%

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.	e.l.f. Beauty, Inc. economic spread ratio improved from 2022 to 2023 and from 2023 to 2024.

e.l.f. Beauty, Inc., economic profit margin calculation, comparison to benchmarks

	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	(43,508)	(36,939)	(57,389)	(75,760)	(42,810)
Net sales	1,023,932)	578,844)	392,155)	318,110)	282,851)
Performance Ratio
Economic profit margin²	-4.25%	-6.38%	-14.63%	-23.82%	-15.14%
Benchmarks
Economic Profit Margin, Competitors³
Procter & Gamble Co.	9.27%	9.16%	9.58%	9.68%	7.74%

Based on: 10-K (reporting date: 2024-03-31), 10-K (reporting date: 2023-03-31), 10-K (reporting date: 2022-03-31), 10-K (reporting date: 2021-03-31), 10-K (reporting date: 2020-03-31).

¹ Economic profit. See details »

² 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × -43,508 ÷ 1,023,932 = -4.25%

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.	e.l.f. Beauty, Inc. economic profit margin improved from 2022 to 2023 and from 2023 to 2024.

e.l.f. Beauty, Inc. (NYSE:ELF)

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