Measure how much value a company creates above its required return on invested capital — positive EVA signals true shareholder value creation.
Operating profit after taxes, excluding financing costs
Total capital invested in the business (equity + debt)
Blended cost of debt and equity capital
Economic Value Added measures whether a company generates returns above its cost of capital. Positive EVA indicates value creation; negative EVA indicates value destruction.
Economic Value Added
Capital Charge
Return on Invested Capital
WACC:
Positive EVA means the company earns more than its cost of capital, creating shareholder value.
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