Measures the value created by a company over its cost of capital.

What it Measures ?

Whether we are earning more than the cost of capital used.

Relevant StakeHolders 

CFO, Strategy Team

In-depth Use Case / Real-world Example

EVA is calculated by subtracting the company’s cost of capital from its net operating profit after taxes (NOPAT). If NOPAT is ₹200,000 and the cost of capital is ₹150,000, the EVA is ₹50,000. EVA indicates whether a company is creating or destroying shareholder value by covering its capital costs.