Compute a company’s economic profit: EVA = NOPAT − (WACC × invested capital). Four modes — from NOPAT directly, from the ROIC vs WACC spread, reverse solver, and two-company comparison — all in your browser, with no data sent anywhere.
Education, not investment advice: this calculator is an educational computation tool, not professional investment or financial advice. Results depend on the assumptions and inputs you enter.
EVA from NOPAT, WACC, and Invested Capital
EVA = NOPAT − (WACC × Capital)
Capital charge (WACC × Capital)—
EVA margin (EVA ÷ Capital)—
EVA—
Interpretation—
Results are educational estimates based on your inputs, not investment advice. The WACC used should be computed from the actual capital structure (see the cost of capital calculator).
EVA from the ROIC vs WACC Spread
EVA = (ROIC − WACC) × Capital
Spread (ROIC − WACC)—
EVA—
Interpretation—
Results are educational estimates, not investment advice. A positive spread means the return on capital exceeds its cost; a negative spread means the opposite.
Reverse Solver
Two commonly used reverse questions: the maximum WACC for EVA to break even, and the minimum NOPAT for EVA to reach a target.
3a. Breakeven WACC (EVA = 0) from NOPAT + capital
WACC* = NOPAT ÷ Capital
Breakeven WACC—
Meaning—
3b. Minimum NOPAT from target EVA
Minimum NOPAT = Target EVA + (WACC × Capital)
Minimum NOPAT—
Results are educational estimates, not investment advice. This solver answers a mathematical question from the EVA formula, not the target the company should chase.
2-Company / Division Comparison
Compare the EVA of two entities with their own inputs (both use the mode 1 formula).
Company A
Company B
Company A EVA—
Company B EVA—
Difference (A − B)—
Higher EVA—
EVA result
Descriptive interpretation
EVA above 0
Creates economic value in that period
EVA equal to 0
Break-even — return exactly covers the cost of capital
EVA below 0
Destroys economic value in that period
This comparison is descriptive and educational, not a recommendation to pick a company or an investment decision. Make sure capital definitions and periods are consistent across entities.
Questions and Answers
What is Economic Value Added (EVA)?
Economic Value Added (EVA) is a measure of economic profit: company earnings after deducting all capital costs, including the equity capital cost that does not appear in the income statement. The formula is EVA = NOPAT minus (WACC times invested capital), or equivalently (ROIC minus WACC) times invested capital. Example: NOPAT of Rp1.2 billion, WACC of 10 percent, and invested capital of Rp10 billion give a capital charge of Rp1 billion, so EVA = Rp1.2 billion minus Rp1 billion = Rp200 million.
What is NOPAT?
NOPAT (Net Operating Profit After Tax) is after-tax operating profit: earnings from the company’s core operating activities after tax, but before deducting interest expense. Because interest expense is excluded from the computation, NOPAT reflects pure operating performance unaffected by financing structure. Example: operating profit of Rp1.5 billion with an effective tax rate of 20 percent gives NOPAT = Rp1.5 billion times 0.8 = Rp1.2 billion.
What is WACC and what is its role in EVA?
WACC (Weighted Average Cost of Capital) is the weighted average cost of capital: the minimum return demanded by all capital providers (shareholders and lenders). In EVA, WACC serves as the price of capital — multiplied by invested capital to get the capital charge that operating profit must exceed. This calculator takes WACC as an input; to compute WACC from the capital structure, use our cost of capital calculator.
What is ROIC?
ROIC (Return on Invested Capital) is the ratio of NOPAT divided by invested capital, showing what percentage return each rupiah of capital generates. Example: NOPAT of Rp1.2 billion divided by capital of Rp10 billion = 12 percent. The difference of ROIC minus WACC is called the spread: ROIC of 12 percent minus WACC of 10 percent = 2 percent, so EVA = 2 percent times Rp10 billion = Rp200 million.
How does EVA differ from accounting profit?
Accounting profit only deducts explicit costs like debt interest, while EVA also deducts the equity capital cost through WACC. As a result, a company can post positive accounting profit but negative EVA — meaning it destroys value economically because its returns do not cover the cost of capital. Example: NOPAT of Rp500 million looks profitable, but with WACC of 12 percent and capital of Rp5 billion, the capital charge is Rp600 million, so EVA = Rp500 million minus Rp600 million = minus Rp100 million.
How do EVA and MVA relate?
MVA (Market Value Added) is the difference between the company’s market value and the capital invested in it. EVA measures value creation in a single period, while MVA reflects the market’s expectation of all future discounted EVA. Descriptively, a consistent run of positive EVA tends to align with positive MVA, and vice versa.
How do you read EVA results?
The interpretation is descriptive, not a recommendation: EVA above zero means the company creates economic value in that period; EVA equal to zero means break-even, return exactly covering the cost of capital; EVA below zero means the company destroys economic value. Results always depend on input assumptions, especially the WACC estimate and the definition of invested capital.
Is this calculator investment advice?
No. This calculator is an educational computation tool for understanding Economic Value Added, not professional investment or financial advice. The numbers it produces are only as accurate as the assumptions you enter, and the EVA model has limitations — for example, sensitivity to how capital and WACC are measured. For real decisions, consult a professional financial adviser.
We use cookies and third-party services (including Google AdSense) to personalize content, analyze traffic, and serve relevant ads. By clicking "Accept", you consent to our use of cookies as described in our Privacy Policy.
Report an issue
2 taps, no typing needed — diagnostics are sent automatically.