r = { mathit{NOPAT} over K } , is the Return on Invested Capital (ROIC);
c , is the weighted average cost of capital (WACC);
K , is the economic capital employed;
NOPAT is the net operating profit after tax, with adjustments and translations, generally for the amortization of goodwill, the capitalization of brand advertising and other non-cash items.
EVA Calculation:
EVA = net operating profit after taxes – a capital charge [the residual income method]
therefore EVA = NOPAT – (c × capital), or alternatively
r = { mathit{NOPAT} over K } , is the Return on Invested Capital (ROIC); c , is the weighted average cost of capital (WACC); K , is the economic capital employed;NOPAT is the net operating profit after tax, with adjustments and translations, generally for the amortization of goodwill, the capitalization of brand advertising and other non-cash items.EVA Calculation:EVA = net operating profit after taxes – a capital charge [the residual income method]therefore EVA = NOPAT – (c × capital), or alternatively
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