Practice: Income statement

• EVA calculation begins with Operating profit which is deducted with taxes and capital costs in order to get EVA
  • Financial incomes can be added to Operating profit since they are part from normal operations (and besides cash and bank are with when capital costs are defined) but usually financial incomes are so small in industrial companies that they can be left out
  • Taxes are calculated simply: Operating profit x tax rate
    [an error occurred while processing this directive] depreciation but these things are taken into account elsewhere (tax shield of interest rates are taken into account in calculating WACC and taxes on reserves etc. can be considered as non-interest bearing debt which do not have any capital costs)