Economic Value Added (EVA)
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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.
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e.l.f. Beauty, Inc. pages available for free this week:
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Return on Equity (ROE) since 2016
- Current Ratio since 2016
- Price to Sales (P/S) since 2016
- Analysis of Revenues
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Economic Profit
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 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT experienced significant fluctuations over the analyzed period. It started at 26,428 thousand USD in 2020, dropped sharply to 618 thousand USD in 2021, then recovered to 20,327 thousand USD in 2022. The upward trend continued in 2023, reaching 57,046 thousand USD, and culminated at 132,182 thousand USD in 2024. This indicates a strong recovery and growth in operating profitability after taxes, especially notable in the last two years.
- Cost of Capital
- The cost of capital showed a gradual increase over the period, rising from 17.64% in 2020 to a peak of 20.19% in 2023. In 2024, it slightly decreased to 20.01%. This upward trajectory suggests a generally higher expected return required by investors or increased risk perception over time, although a minor decline in the final year may indicate stabilization.
- Invested Capital
- Invested capital demonstrated a steady increase from 418,026 thousand USD in 2020 to 496,463 thousand USD in 2023. A substantial jump is observed in 2024, where invested capital nearly doubled to 936,268 thousand USD. This sharp increase in the latest year indicates significant capital investment or acquisitions, which could support expansion or operational scaling.
- Economic Profit
- Economic profit remained negative throughout the period, though the magnitude fluctuated. The largest negative economic profit was registered in 2021 at -80,790 thousand USD. While the losses narrowed slightly in subsequent years, with values of -62,530 thousand USD in 2022 and -43,190 thousand USD in 2023, there was a modest increase in the negative value to -55,144 thousand USD in 2024. This persistent negative economic profit suggests that the return on invested capital did not exceed the cost of capital during the entire period, indicating a destruction of shareholder value despite the recent improvement in NOPAT and invested capital growth.
Net Operating Profit after Taxes (NOPAT)
e.l.f. Beauty, Inc., NOPAT calculation
US$ in thousands
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
= × =
5 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
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
= × 21.00% =
8 Elimination of after taxes investment income.
The analysis of the financial performance over the reported periods reveals significant fluctuations and an overall strong upward trend in profitability metrics.
- Net Income
- The net income experienced a notable decline from 17,884 thousand USD in 2020 to 6,232 thousand USD in 2021, indicating a decrease in profitability. However, from 2021 onwards, the net income showed a robust recovery and growth, rising substantially to 21,770 thousand USD in 2022 and accelerating sharply to 61,530 thousand USD in 2023. This growth continued into 2024, with net income reaching 127,663 thousand USD, reflecting a significant improvement in the company's earnings over the five-year span.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT followed a somewhat similar pattern, starting at 26,428 thousand USD in 2020 and dumping dramatically to 618 thousand USD in 2021, which suggests operational challenges or increased expenses during that year. Subsequently, NOPAT rebounded to 20,327 thousand USD in 2022 and increased strongly to 57,046 thousand USD in 2023. The upward trajectory persisted, with NOPAT climbing to 132,182 thousand USD in 2024, indicating enhanced operational efficiency and profitability after accounting for taxes.
Overall, the data indicates that despite a difficult year in 2021, both net income and NOPAT improved significantly in the following years, culminating in record-high results in 2024. This suggests effective management strategies, operational improvements, or market conditions that positively impacted profitability and operational performance.
Cash Operating Taxes
e.l.f. Beauty, Inc., cash operating taxes calculation
US$ in thousands
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).
- Provision (benefit) for income taxes
- The provision for income taxes displayed notable volatility over the analyzed periods. In the year ending March 31, 2020, there was a positive provision amounting to 6,185 thousand US dollars, which turned into a tax benefit (negative provision) of 2,542 thousand US dollars in the subsequent year. The provision reverted to a positive figure of 3,661 thousand US dollars for the year ending March 31, 2022, then increased slightly to 2,544 thousand US dollars in 2023, followed by a substantial rise to 13,327 thousand US dollars in 2024. This substantial increase in 2024 suggests a significant rise in taxable income or changes in tax strategy or rates affecting the provision.
- Cash operating taxes
- Cash operating taxes exhibited a consistent upward trajectory throughout the analyzed timeline. Starting at 5,178 thousand US dollars in 2020, this figure increased year-over-year, reaching 7,044 thousand US dollars in 2021, 7,989 thousand US dollars in 2022, then 9,455 thousand US dollars in 2023. The most pronounced increase occurred between 2023 and 2024, when cash operating taxes nearly doubled to 18,383 thousand US dollars. This trend indicates increasing cash outflows related to tax obligations, potentially reflecting higher taxable profits, changes in tax regulations, or improved collection and payment practices.
Invested Capital
e.l.f. Beauty, Inc., invested capital calculation (financing approach)
US$ in thousands
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.
- Total Reported Debt & Leases
- The total reported debt and leases showed a declining trend from March 31, 2020, through March 31, 2023, decreasing from $152.978 million to $82.167 million. This represents a substantial reduction in debt and lease obligations over this period. However, as of March 31, 2024, there was a significant increase to $290.601 million, indicating a sharp rise in leverage or financing commitments in the most recent year.
- Stockholders' Equity
- Stockholders' equity demonstrated consistent growth over the five-year period. Starting at $242.171 million in March 2020, it increased steadily each year, reaching $642.572 million by March 2024. This reflects a strong accumulation of equity, potentially through retained earnings and/or capital infusions, suggesting an improvement in the company's net assets and financial strength.
- Invested Capital
- Invested capital rose gradually from $418.026 million in March 2020 to $496.463 million in March 2023. Notably, there was a considerable jump to $936.268 million as of March 2024. This substantial increase parallels the surge in total debt and leases, possibly indicating increased investments or assets financed by the higher debt levels. The overall trend suggests expansion or significant investment activities in the latest fiscal year.
Cost of Capital
e.l.f. Beauty, Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, including current portion3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-03-31).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt, including current portion. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, including current portion3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, including current portion3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, including current portion3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt, including current portion3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
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 »
Economic Spread Ratio
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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Procter & Gamble Co. | ||||||
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 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibits a persistent negative trend throughout the five-year period. Beginning at -47,318 thousand USD, the deficit deepened significantly to -80,790 thousand USD by the end of the fiscal year 2021. Subsequently, there was a partial recovery, with the loss narrowing to -62,530 thousand USD in 2022 and further to -43,190 thousand USD in 2023. However, the figure deteriorated again in 2024 to -55,144 thousand USD. Overall, the economic profit remains negative, indicating that the company has consistently generated returns below its cost of capital.
- Invested Capital
- The invested capital steadily increased over the analyzed period. The base figure of 418,026 thousand USD expanded moderately year-over-year until 2023, where it registered 496,463 thousand USD. A marked acceleration occurred between 2023 and 2024, with the invested capital nearly doubling to 936,268 thousand USD. This significant increase may reflect substantial investments or asset acquisitions, potentially intended to support future growth initiatives.
- Economic Spread Ratio
- The economic spread ratio remains negative during the entire period, although there is an improvement trend evident. Initially at -11.32% in 2020, the negative spread intensified to -18.61% in 2021, coinciding with the peak in negative economic profit. From 2022 onwards, the ratio improved steadily, reaching -5.89% by 2024. This positive movement suggests the company is gradually moving toward achieving returns closer to or exceeding its cost of capital, despite still falling short.
- Overall Analysis
- The financial data reflect ongoing challenges in generating positive economic profit, with persistent losses despite a consistently growing base of invested capital. The sharp increase in invested capital in the latest year may indicate strategic investments, but the failure to convert this into positive economic profit or a positive economic spread ratio raises concerns about the efficiency of capital utilization. The gradual improvement in the economic spread ratio hints at potential operational or financial enhancements, yet profitability remains below the required threshold to add economic value.
Economic Profit Margin
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 | ||||||
| Net sales | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Procter & Gamble Co. | ||||||
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 × ÷ =
3 Click competitor name to see calculations.
- Net Sales
- Net sales exhibited a consistent upward trend over the five-year period. Starting at approximately $282.9 million, sales increased steadily each year, reaching over $1 billion by the latest fiscal year. The most significant jump occurred between the years ending March 31, 2023, and March 31, 2024, where sales nearly doubled from about $579 million to $1.02 billion.
- Economic Profit
- Economic profit remained negative throughout the entire period, indicating that the company did not achieve returns exceeding its cost of capital in any year. The economic loss deepened from about -$47.3 million in 2020 to a peak loss of nearly -$80.8 million in 2021. Subsequently, there was some improvement as losses narrowed to around -$43.2 million in 2023, before widening again to approximately -$55.1 million in 2024. Despite fluctuating losses, the trend suggests some operational challenges in converting increased sales into economic profitability.
- Economic Profit Margin
- The economic profit margin followed a similar pattern to economic profit, remaining negative each year. The margin declined sharply from -16.73% in 2020 to a low of -25.4% in 2021, indicating increasing inefficiencies or cost pressures relative to revenue. After 2021, the margin showed improvement, becoming less negative over the next two years, reaching -7.46% in 2023. However, a slight setback occurred in 2024, with the margin moving to -5.39%. Despite improvements, the persistent negative margins highlight ongoing challenges in achieving sustainable profitability relative to invested capital.
- Overall Analysis
- The data reveals robust revenue growth alongside persistent economic losses. The remarkable increase in net sales suggests successful market expansion or increased demand. However, the inability to convert higher revenues into positive economic profit and the consistent negative economic profit margins indicate issues related to cost structure, investment returns, or operational efficiency. The partial recovery in economic profit and margins post-2021 suggests some improved management effectiveness, yet the resumed increase in losses in the final year implies that profitability challenges remain significant. Strategic focus on cost control and capital efficiency would be critical to reversing these trends in future periods.