Economic Value Added Calculator

It means after-tax operating profit exceeded the capital charge on the invested-capital base. In simple terms, the business cleared its cost of capital and created an economic surplus for the period.

Yes. Accounting profit does not automatically cover the full opportunity cost of the capital tied up in the business. EVA turns negative when operating profit is positive but still too low relative to invested capital and WACC.

They are closely related and often overlap, but terminology is not always used identically across sources. This calculator uses the standard EVA-style formula of NOPAT minus invested capital multiplied by WACC.

No. Positive EVA is one performance signal, not a complete investment conclusion. Valuation, growth durability, balance-sheet risk, and the quality of the assumptions behind WACC still matter.

Use NOPAT when it is already available and normalized. If you only have EBIT or operating profit, estimate NOPAT by applying an appropriate tax rate before comparing it with the capital charge.

Average invested capital is usually better for a period result because NOPAT was earned across the period, not only at the ending balance-sheet date. A period-end figure can still be useful for a quick screen if you use it consistently.

EVA divided by invested capital scales the economic surplus to the capital base. It is useful when comparing businesses or periods that have different invested-capital sizes.

EVA depends directly on the capital charge. If WACC is uncertain, a small change in the hurdle rate can change the EVA result, especially for capital-intensive businesses.