Economic value added (EVA)
Compute economic value added — profit after charging for all capital — to see whether a company created or destroyed value once the full cost of its equity and debt is counted.
Runs entirely in your browserRuns entirely on your device — nothing you type is sent anywhere. Educational only, and not investment advice.
How to use this calculator
Each step names a control you will find on screen above.
- NOPAT
Net operating profit after tax — operating profit stripped of financing effects and taxed. It is the return the whole business generated.
- Invested capital
The capital put to work — typically equity plus debt minus surplus cash. It is what the capital charge is levied on.
- WACC
The weighted average cost of capital, the blended rate all financiers require. Multiplied by invested capital it gives the capital charge.
Worked example: Profitable, and value-creating
NOPAT ₹112.5 cr, invested capital ₹900 cr, WACC 10%.
What to enter
- NOPAT
- ₹112.5 cr
- Invested capital
- ₹900 cr
- WACC
- 10%
What it shows you
- Capital charge
- ₹90 cr
- EVA
- ₹22.5 cr
- ROIC − WACC
- +2.5%
- If WACC were 13%
- EVA = −₹4.5 cr
Where this is taught
A calculator gives you a number. These explain what the number means and when it misleads you.
- Fundamental Analysis11 minEconomic value added: profit after charging for all capitalAccounting profit charges for debt but never for equity. EVA — residual income — subtracts the full cost of capital, revealing whether a company truly created value or just looked profitable.
- Fundamental Analysis11 minROIC: the truest test of a business’s qualityReturn on invested capital measures how well a company turns all its capital — debt and equity — into profit. Why it beats ROE, how it compares to the cost of that capital, and what a great ROIC looks like.
- Fundamental Analysis9 minCFROI: a return on capital that survives inflation and accountingAccounting returns like ROIC are nominal and shaped by a firm’s bookkeeping choices, which makes comparing companies across time and borders treacherous. CFROI tries to fix that by expressing return as a real, inflation-adjusted rate — closer to an economic truth than an accounting one.