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Economic Value Added

Economic value added is an estimate of a firm's economic profit, or the value created in excess of the required return of the company's shareholders. Economic value added is the net profit less the equity cost of the firm's capital.

Economic value added equals the difference between net operating profit after taxes and the product of capital employed and the weighted average cost of capital.

Formula

QuantityVariable["EVA", "Money"] == -(QuantityVariable["K", "Money"]*QuantityVariable["WACC", "Unitless"]) + QuantityVariable[Subscript["P", "t"], "Money"]

symbol description physical quantity
EVA economic value added "Money"
K capital employed "Money"
WACC weighted average cost of capital "Unitless"
Pt net operating profit after taxes "Money"

Forms

Examples

Get the resource:

In[1]:=
ResourceObject["Economic Value Added"]
Out[1]=

Get the formula:

In[2]:=
FormulaData[ResourceObject["Economic Value Added"]]
Out[2]=

Use some values:

In[3]:=
FormulaData[ ResourceObject[ "Economic Value Added"], {QuantityVariable["EVA","Money"] -> Quantity[12170, "USDollars"], QuantityVariable[ \!\(\*SubscriptBox[\("P"\), \("t"\)]\),"Money"] -> Quantity[13000, "USDollars"]}]
Out[3]=

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