Economic Value Added (EVA) Calculator
Formula: EVA = NOPAT – (Invested Capital × Cost of Capital)
Economic Value Added (EVA) Calculator
Component | Description |
---|---|
Net Operating Profit After Taxes (NOPAT) | The profit a company generates from its operations after taxes. |
Capital Invested | Total amount of capital invested in a company. |
Weighted Average Cost of Capital (WACC) | The average rate of return a company is expected to pay its shareholders for the use of their capital. |
Economic Value Added (EVA) | Measure of a company’s financial performance that shows the net profit earned above the required return on the company’s capital. |
Formula | EVA = NOPAT – (Capital Invested × WACC) |
Purpose | Helps to determine whether a company is creating value for its shareholders. |