Use our Economic Value Added (EVA) calculator to quickly determine a company's real economic profit. This crucial metric helps evaluate if a business generates value above its cost of capital, indicating genuine wealth creation for shareholders. Simply input NOPAT, Capital Employed, and WACC for instant insights.
Formula:
The formula for Economic Value Added (EVA) is:
EVA = NOPAT - (Capital Employed × WACC)
- NOPAT: Net Operating Profit After Tax (Operating profit after taxes, but before financing costs).
- Capital Employed: Total capital utilized by the company (e.g., total assets minus current liabilities).
- WACC: Weighted Average Cost of Capital (The average rate a company expects to pay to finance its assets).