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EVA Calculator (Economic Value Added)

Does the business create value ABOVE its cost of capital?

Inputs

NOPAT

Also called: Net operating profit after tax

Where to find it: Derive from the income statement (EBIT × (1 − tax rate)).

How to derive: EBIT × (1 − tax rate). E.g. EBIT 800, tax 25% → 600.

Invested capital

Also called: Capital employed

Where to find it: Derive from the balance sheet.

How to derive: Equity + interest-bearing debt − cash (simplified).

%

WACC (discount rate)

Also called: Weighted average cost of capital

Where to find it: Compute it yourself (CAPM) — or use our discount-rate calculator.

How to derive: Weighted mix of cost of equity (CAPM) and cost of debt. Rule of thumb: 8–10%.

Result, live

EVA (m)
–
ROIC
–
Spread
–

EVA = NOPAT − capital × WACC. A persistently positive spread signals a moat; our quality score uses this too (ROIC factor).

This valuation on real stocks

Currently below their fair value, valued with our full 21-model approach:

600809 +51%Shanxi Xinghuacun Fen Wine Factory Co Ltd ABF +50%Associated British Foods PLC TOL +50%Toll Brothers Inc 002001 +49%Zhejiang Nhu Co Ltd AGS +49%ageas SA/NV KDDIY +49%KDDI Corp PK MSADY +49%MS&AD Insurance Group Holdings PK TIMS3 +47%TIM S.A.

Economic Value Added (EVA) answers one simple question: does a company earn more than its capital costs? Real value is created only once operating profit exceeds the cost of capital. This calculator shows you the amount instantly.

How the formula works

A capital charge is subtracted from after-tax operating profit (NOPAT): invested capital times the weighted average cost of capital (WACC):

EVA = NOPAT − (invested capital × WACC)

Example: NOPAT $800m, capital $6,000m, WACC 9%. Capital charge = 6,000 × 9% = $540m. EVA = 800 − 540 = $260m. ROIC is 13.3%, the spread +4.3 points.

How to read the result

What matters is the spread (ROIC minus WACC):

  • Positive — the business earns above its cost of capital; persistently, a moat signal.
  • Near zero — it treads water, earning exactly its cost of capital.
  • Negative — ROIC below WACC: value destruction, even if the accounts show a profit.

What to watch out for

  • NOPAT and capital need adjustments (leases, goodwill) — accounting choices affect the result.
  • One year is not enough. A persistently positive spread is what counts.
  • The WACC drives everything — a small change can flip the sign.

Frequently asked questions

What is the difference between EVA and profit?
Reported profit deducts interest on debt but ignores the cost of equity. EVA charges the full capital base at the WACC — a company can show a profit and still destroy value.
What is a good EVA?
More important than the absolute figure is a spread that stays positive over years. Large firms naturally show larger EVA amounts — put it in relation to invested capital.
Do you use EVA yourselves?
Yes — the ROIC-above-WACC spread feeds our quality score. In our Fair Value Calculator this is already computed for 35,000+ stocks, so there is no typing required.

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Not financial advice · No buy/sell recommendations · Past performance is not a guarantee of future results.