Economic Value Added (EVA) Calculator
This calculator helps you determine the Economic Value Added (EVA), a key financial performance metric that calculates a company's true economic profit. EVA considers both operating income and the cost of capital, providing a clearer picture of value creation above and beyond the cost of capital.
Calculate EVA (Economic Value Added) from Operating Income and Cost of Capital
Economic Value Added (EVA) Formula
Where:
- EVA – Economic Value Added
- NOPAT – Net Operating Profit After Taxes
- Capital Invested – total capital invested in the business
- WACC – Weighted Average Cost of Capital
EVA is used to measure the value a company generates from its capital investment, considering both operational efficiency and capital costs. A positive EVA indicates that the company is generating returns above its cost of capital, creating value for shareholders. EVA is widely used in performance measurement, financial analysis, and value-based management to assess the real profitability of a business.