✖Net Operating Profit After Tax is a company's after-tax operating profit for all investors, including shareholders and debt holders.ⓘ Net Operating Profit After Tax [NOPAT]			+10% -10%
✖The Weighted Average Cost of Capital is the rate that a company is expected to pay on average to all its security holders to finance its assets.ⓘ Weighted Average Cost of Capital [WACC]			+10% -10%
✖Total Invested Capital is the total amount of money a company raises through the sale of shares and the issuance of bonds.ⓘ Total Invested Capital [TC]			+10% -10%

✖Economic Value Added is a performance metric that calculates the creation of shareholder value.ⓘ Economic Value Added [EVA]

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Formula

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Economic Value Added

Formula

`"EVA" = "NOPAT"-"WACC"*"TC"`

Example

`"449999"="1000010"-"11"*"50001"`

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Economic Value Added Solution

STEP 0: Pre-Calculation Summary

Formula Used

Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital
EVA = NOPAT-WACC*TC
This formula uses 4 Variables

Variables Used

Economic Value Added - Economic Value Added is a performance metric that calculates the creation of shareholder value.
Net Operating Profit After Tax - Net Operating Profit After Tax is a company's after-tax operating profit for all investors, including shareholders and debt holders.
Weighted Average Cost of Capital - The Weighted Average Cost of Capital is the rate that a company is expected to pay on average to all its security holders to finance its assets.
Total Invested Capital - Total Invested Capital is the total amount of money a company raises through the sale of shares and the issuance of bonds.

STEP 1: Convert Input(s) to Base Unit

Net Operating Profit After Tax: 1000010 --> No Conversion Required
Weighted Average Cost of Capital: 11 --> No Conversion Required
Total Invested Capital: 50001 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

EVA = NOPAT-WACC*TC --> 1000010-11*50001

Evaluating ... ...

EVA = 449999

STEP 3: Convert Result to Output's Unit

449999 --> No Conversion Required

FINAL ANSWER

449999 <-- Economic Value Added

(Calculation completed in 00.004 seconds)

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Created by Kashish Arora

Satyawati College (DU), New Delhi

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< 9 Performance Ratio Calculators

Economic Value Added

Go Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital

Cash Flow per Share

Go Cash Flow per Share = (Operating Cash Flow-Preferred Dividends)/Total Common Shares Outstanding

Enterprise Value

Go Enterprise Value = Market Capitalization+Total Debt of Company-Cash and Cash Equivalents

Market Capitalization

Go Market Capitalization = Current Share Price*Total Shares Outstanding

Market to Book Ratio

Go Market to Book value = Market Capitalization/Book Value of Equity

Return on Equity using Shareholder's Equity

Go Return on Equity = (Net Income/Average Shareholders' Equity)*100

Cash Return on Assets

Go Cash Return on Assets = Operating Cash Flow/Total Average Assets

Cash to Net Income ratio

Go Cash Flow to Income = Operating Cash Flow/Net Income

Cash Flow to Sales

Go Cash Flow to Sales = Operating Cash Flow/Sales

< 22 Important Formulas of Financial Ratios Calculators

Fixed Charge Coverage Ratio

Go Fixed Charge Coverage Ratio = (Earnings Before Interest and Taxes+Fixed Charges Before Taxes)/(Fixed Charges Before Taxes+Interest)

Free Cash Flow to Firm

Go Free Cash Flow to Firm (FCFF) = Cash Flow from Operations+(Interest Expense*(1-Tax Rate))-Net Capital Expenditures

Economic Value Added

Go Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital

Average Collection Period

Go Average Collection Period = Accounts Receivable/(Sales for Reporting Period/Reporting Period Length)

Revenue Growth Rate

Go Revenue Growth Rate = ((Current Period Revenue-Previous Period Revenue)/Previous Period Revenue)*100

Sales Growth Rate

Go Sales Growth Rate = ((Current Period Sales-Previous Period Sales)/Previous Period Sales)*100

Business Quick Ratio

Go Quick Ratio = (Current Assets-Inventory of Liquidity Ratio)/Current Liabilities

Quick Ratio

Go Quick Ratio = (Current Assets-Inventory of Liquidity Ratio)/Current Liabilities

Interest Coverage Ratio

Go Interest Coverage Ratio = Earnings Before Interest and Taxes/Interest Expense

Debt to Equity Ratio

Go Debt to Equity (D/E) = Total Liabilities/Total Shareholders' Equity*100

Market Capitalization

Go Market Capitalization = Current Share Price*Total Shares Outstanding

Receivables Turnover Ratio

Go Receivables Turnover Ratio = Net Sales/Average Accounts Receivables

Free Cash Flow

Go Free Cash Flow = Cash Flow from Operations-Net Capital Expenditures

Fixed Asset Turnover Ratio

Go Fixed Asset Turnover Ratio = Net Sales/Average Net Fixed Assets

Equity Multiplier

Go Equity Multiplier = Total Assets/Total Shareholders' Equity

Inventory Turnover Ratio

Go Inventory Turnover Ratio = Cost of Goods Sold/Inventory

Sales to Receivables Ratio

Go Sales to Receivables Ratio = Net Sales/Net Receivables

Debt to Assets Ratio

Go Debt to Assets Ratio = Total Liabilities/Total Assets

Business Current Ratio

Go Current Ratio = Current Assets/Current Liabilities

Current Ratio

Go Current Ratio = Current Assets/Current Liabilities

Cash Flow to Sales

Go Cash Flow to Sales = Operating Cash Flow/Sales

Total Asset Turnover

Go Total Asset Turnover = Sales/Total Assets

Economic Value Added Formula

Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital
EVA = NOPAT-WACC*TC

What is Economic Value Added?

Economic Value Added (EVA) is a performance metric that calculates the creation of shareholder value; however, it distinguishes itself from traditional financial performance metrics, such as net profit and earnings per share (EPS). EVA is the calculation of what profits remain after the costs of a company's capital—debt and equity—are deducted from operating profit. The idea is simple but rigorous: true profit should account for the cost of capital.

How to Calculate Economic Value Added?

Economic Value Added calculator uses Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital to calculate the Economic Value Added, Economic Value Added measures a company's economic profit by deducting the cost of capital from its net operating profit after tax, reflecting the value created or destroyed by management. Economic Value Added is denoted by EVA symbol.

How to calculate Economic Value Added using this online calculator? To use this online calculator for Economic Value Added, enter Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC) & Total Invested Capital (TC) and hit the calculate button. Here is how the Economic Value Added calculation can be explained with given input values -> 449999 = 1000010-11*50001.

FAQ

What is Economic Value Added?

Economic Value Added measures a company's economic profit by deducting the cost of capital from its net operating profit after tax, reflecting the value created or destroyed by management and is represented as EVA = NOPAT-WACC*TC or Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital. Net Operating Profit After Tax is a company's after-tax operating profit for all investors, including shareholders and debt holders, The Weighted Average Cost of Capital is the rate that a company is expected to pay on average to all its security holders to finance its assets & Total Invested Capital is the total amount of money a company raises through the sale of shares and the issuance of bonds.

How to calculate Economic Value Added?

Economic Value Added measures a company's economic profit by deducting the cost of capital from its net operating profit after tax, reflecting the value created or destroyed by management is calculated using Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital. To calculate Economic Value Added, you need Net Operating Profit After Tax (NOPAT), Weighted Average Cost of Capital (WACC) & Total Invested Capital (TC). With our tool, you need to enter the respective value for Net Operating Profit After Tax, Weighted Average Cost of Capital & Total Invested Capital and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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