A measure used for estimating the economic performance of an organization is known as the economic value added which can be found by subtracting the cost used for the business from the economic profit of the company.

Calculator of Economic Value Added

Formula of Economic Value Added

NOPAT = Operating Income x (1- Tax Rate)

V = E + D

WACC = ((E / V) * Re) + [ ((D / V) * Rd) * (1 – T)]

EVA = NOPAT – (Capital Invested x WACC)

Where,

  • EVA = Economic Value Added
  • NOPAT = Net Operating Profit After Tax
  • WACC = Weighted Average Cost of Capital
  • T = Tax Rate E = Market Value of the Company Equity
  • D = Market Value of the Company Debt
  • V = Total Market Value of the Company
  • Re = Cost of Equity
  • Rd = Cost of Debt

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