Economic Value Added (EVA)

Home » CMA Glossary Term » Ratios and Performance Metrics » Economic Value Added (EVA)

Economic Value Added is defined as the financial performance metric that calculates the true economic profit of a company. It is determined by subtracting the firm’s cost of capital from its net operating profit after taxes (NOPAT). EVA provides insight into how effectively a company generates value beyond the required return of its shareholders, serving as a measure of managerial effectiveness and value creation.

CMA Prep Course

CMA Exam Academy is a proven, 16-week per part online coaching program to help you pass the CMA. The Academy’s comprehensive curriculum will help you pass the CMA exam and achieve your dreams of earning 6-figures per year, ascend to the executive ranks and earn the respect from your peers.