How to Calculate EVA

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How to Calculate EVA
Malygin Vasily, Member
Another way to describe how to calculate EVA:
Economic Value Added = NOPAT - Capital Charges
or
Economic Value Added = NOPAT - ( Invested Capital * WACC )
or
Economic Value Added = Invested Capital * ( ROIC - WACC )
 

 
Calculating EVA Once Equity is Raised
Rahul Patil, Member
We calculate EVA as NOPAT(%) - WACC. But once equity is raised cost of equity is out of picture. Is EVA still a good measure?
Another question is that we get EVA after deducting interest. So essentially we are removing the debt cost. And we are subtracting debt cost again in NOPAT - WACC. So shouldn't we be using EBIT - WACC?
 

 











 

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