Two variables affecting the economic value added (EVA)

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216275%3A25410%2F17%3A39911141" target="_blank" >RIV/00216275:25410/17:39911141 - isvavai.cz</a>
Result on the web
<a href="https://is.muni.cz/do/econ/sborniky/70896034/EFS2017-Proceedings_1_final.pdf" target="_blank" >https://is.muni.cz/do/econ/sborniky/70896034/EFS2017-Proceedings_1_final.pdf</a>
DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Two variables affecting the economic value added (EVA)
Original language description
Economic value added EVA is one of the most important indicators of financial analysis, however, it has not been being used widely in practice yet. A possible reason is its calculation that is more complicated than for conventional one, e.g. ratios. This complexity primarily involves calculating the average weighted cost of capital (WACC) and unequal approach to the calculation of net operating profit after tax (NOPAT), the WACC and NOPAT are initial variables for the calculation of EVA. The aim of this paper is to summarize the basic approaches to calculating WACC, particularly the cost of equity and to calculate NOPAT and finally to simplify the calculation of EVA with mathematical analogy modifications. Mathematical adjustment has proved that economic value added is essentially a net profit weighted by the debt proportion in the overall capital structure. This post is to submit a simplification of the indicator of economic value added in an effort to extend its application in practice.
Czech name
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Czech description
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Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year
2017
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection
European Financial Systems 2017 : proceedings of the 14th International Scientific Conference
ISBN
978-80-210-8609-8
ISSN
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e-ISSN
neuvedeno
Number of pages
6
Pages from-to
230-235
Publisher name
Masarykova univerzita
Place of publication
Brno
Event location
Brno
Event date
Jun 26, 2017
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
000418110700028

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