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What is Understanding the EVA Profitability Concept about?
This document discusses the concept of Economic Value Added (EVA) as a measure of profitability that accounts for the cost of capital. EVA is calculated as Net Operating Profit After Tax (NOPAT) minus the cost of capital. Several adjustments are made to traditional accounting figures to calculate NOPAT and invested capital in a way that reflects economic reality. Strategies for increasing EVA include improving returns on existing projects, investing in new projects with returns above the cost of capital, us
- Author
- Sriharsha Inala
- Language
- EN