Enter the net operating profits after tax, the WACC, and the total capital invested into the calculator to determine the total economic value added.
- Economic Profit Calculator
- WACC Calculator (Weighted Average Cost of Capital
- Capital Gains Yield Calculator + Formula
EVA Formula
The following formula is used to calculate the economic value-added.
EVA = NOPAT – (WACC * CI )
- Where EVA is the economic value added
- NOPAT is the net operating profits after tax
- WACC is the weighted average cost of capital
- CI is the capital invested
EVA Definition
EVA is short for economic value added is a measure of the profit added to the economy by a business.
EVA Example
How to calculate EVA?
- First, determine the NOPAT.
Calculate the net operating profits after tax generated by the business.
- Next, determine the WACC.
Calculate the weighted average cost of capital of the business.
- Next, determine the CI.
Calculate the total capital that has been invested in the project.
- Finally, calculate the EVA.
Enter the values from steps 1-3 into the EVA formula above.
FAQ
EVA stands for economic value-added and it is a financial measure that indicates how profitable a particular business or project.
