Economic Value Added (EVA) for Small Business

15.8.1998

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Table of Contents Economic Value Added (EVA) for Small Business What is Economic Value Added (EVA)? What is Economic Value Added (EVA)? (Cont.) EVA Basic Premise Why is EVA also useful for small companies (even with less than 100 employees) ? Why is EVA also useful for small companies (even with less than 100 employees) ? (Cont.) What is Needed to Calculate Company's Economic Value Added (EVA)? Illustration: Common Income Statement Illustration: Common Balance Sheet EVA Calculation Steps Step 1: Calculate Net Operating Profit After Taxes (NOPAT) Step 1: Calculate Net Operating Profit After Taxes (NOPAT) (Cont.) Step 2: Identify Company's Capital (C) Step 3: Determine Capital Cost Rate (CCR) Step 4: Calculate Company's EVAThe Complete Procedure: Calculate EVA in the Internal Reporting EVA Implementation by a Small Company How can the Management in a Small Company Improve EVA? Conclusion Conclusion (Cont.) Questions ? Author:Narcyz Roztocki and Esa Mäkeläinen Email: Esa.Makelainen@iki.fi Home Page: http://www.evanomics.com