Economic Value Added (EVA) Calculator

Calculate the true economic profit of a company by subtracting the cost of all capital used from operating profit.

Profit & Capital

EBIT (Operating Profit)

Corporate Tax Rate (%)

Total Invested Capital

WACC (%)

Value Creation Analysis

EVA$195,000Value Created

NOPAT$395,000

Capital Charge$200,000

Earnings vs. Capital Costs

Overview

Calculate the true economic profit of a company by subtracting the cost of all capital used from operating profit.

💡

Pro Tips

What is EVA?: Economic Value Added (EVA) is a measure of a company's financial performance based on residual wealth, calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
How does it differ from Net Income?: Net income only subtracts the cost of debt (interest). EVA subtracts the cost of ALL capital, including equity. It shows whether a firm is actually earning more than its required return.
What if EVA is negative?: A negative EVA means the company is 'destroying value'—it would have been better for shareholders to invest their money elsewhere at the same risk level.

Fun Facts

"EVA was popularized by the consulting firm Stern Stewart & Co. in the 1990s."
"Many large corporations use EVA as a key metric for determining executive bonuses."
"EVA is closely related to the concept of 'Economic Rent' or 'Residual Income'."

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Economic Value Added (EVA) Calculator

Calculate the true economic profit of a company by subtracting the cost of all capital used from operating profit.

Profit & Capital

EBIT (Operating Profit)

Corporate Tax Rate (%)

Total Invested Capital

WACC (%)

Value Creation Analysis

EVA$195,000Value Created

NOPAT$395,000

Capital Charge$200,000

Earnings vs. Capital Costs

Overview

Calculate the true economic profit of a company by subtracting the cost of all capital used from operating profit.

💡

Pro Tips

What is EVA?: Economic Value Added (EVA) is a measure of a company's financial performance based on residual wealth, calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
How does it differ from Net Income?: Net income only subtracts the cost of debt (interest). EVA subtracts the cost of ALL capital, including equity. It shows whether a firm is actually earning more than its required return.
What if EVA is negative?: A negative EVA means the company is 'destroying value'—it would have been better for shareholders to invest their money elsewhere at the same risk level.

Fun Facts

"EVA was popularized by the consulting firm Stern Stewart & Co. in the 1990s."
"Many large corporations use EVA as a key metric for determining executive bonuses."
"EVA is closely related to the concept of 'Economic Rent' or 'Residual Income'."

Used with this

Similar tools that might be useful

AFFO Calculator

Calculate Adjusted Funds From Operations (AFFO), a key performance metric for Real Estate Investment Trusts (REITs).

AFN (Additional Funds Needed) Calculator

Determine the amount of external funding a business needs to support a projected increase in sales.

ARV Calculator (House Flipping)

Calculate After Repair Value and determine the maximum offer price using the 70% rule for real estate investors.