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EVA

   Also found in: Dictionary/thesaurus, Medical, Acronyms, Encyclopedia, Wikipedia 0.03 sec.
See Economic value added.
Economic Value Added (EVA)

What Does Economic Value Added (EVA) Mean?

A measure of a company's financial performance that is based on the residual wealth calculated by deducting cost of capital from its operating profit (adjusted for taxes on a cash basis). Also called economic profit. The formula for calculating EVA is as follows: EVA = Net Operating Profit after Taxes (NOPAT) - (Capital × Cost of Capital).

Investopedia explains Economic Value Added (EVA)

This measure was devised by Stern Stewart & Co. and is used as a way to ascertain the true economic profit of a company.

Related Terms:
Equity
Market Value
Net Operating Profit after TaxNOPAT
Return on Equity
Return on Net Assets



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