Economic Value Added (EVA) Calculator

A business can report a healthy profit and still destroy value, if that profit doesn't clear the cost of the capital tied up to generate it. EVA is the number that catches that.

Reading This Tool

How To Use This Calculator

Enter operating profit, the tax rate, invested capital, and the weighted average cost of that capital.

EVA charges the business rent for every dollar of capital it uses, at the rate investors could earn elsewhere for the same risk. Positive EVA means returns cleared that hurdle, negative EVA means the business is, in an economic sense, subsidized by capital that would earn more somewhere else.

Your Inputs

EBIT (Operating Profit) $4,000,000

Effective Tax Rate 26.5%

Invested Capital (Debt + Equity) $40,000,000

Weighted Average Cost Of Capital 9.0%

Invested capital is typically total debt plus total equity, or equivalently total assets minus non-interest-bearing current liabilities. Don't have a WACC handy? Our WACC calculator builds one from first principles.

Value Creation Result

NOPAT (After-Tax Operating Profit)

Capital Charge

Economic Value Added

Return On Invested Capital (ROIC)

0.0%

ROIC − WACC Spread

0.0%

NOPAT vs. The Capital Charge It Has To Clear

NOPAT Capital Charge

A single-period, simplified EVA calculation. A full EVA framework typically adjusts accounting NOPAT and capital for items like R&D capitalization, operating leases, and goodwill, this shows the core mechanic without those adjustments.

Need to build that WACC number first?

Go To The WACC Calculator →