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  • Business Valuation Assignment Calculation of EVA ( in Crores)

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    Aashish mishra
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    This document contains calculations to determine the economic value added (EVA) for a company. It first calculates the net operating profit less adjusted taxes (NOPLAT) as ₹75.3 crores. It then determines the company's invested capital is ₹200 crores based on the equity and debt. The weighted average cost of capital (WACC) is calculated to be 14.1%. Finally, the EVA is determined to be ₹47.1 crores by taking the NOPLAT and subtracting the WACC multiplied by the invested capital.

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    Business Valuation Assignment

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    This document contains calculations to determine the economic value added (EVA) for a company. It first calculates the net operating profit less adjusted taxes (NOPLAT) as ₹75.3 crores. It then determines the company's invested capital is ₹200 crores based on the equity and debt. The weighted average cost of capital (WACC) is calculated to be 14.1%. Finally, the EVA is determined to be ₹47.1 crores by taking the NOPLAT and subtracting the WACC multiplied by the invested capital.

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    22 views1 page

    Business Valuation Assignment Calculation of EVA ( in Crores)

    Uploaded by

    Aashish mishra
    This document contains calculations to determine the economic value added (EVA) for a company. It first calculates the net operating profit less adjusted taxes (NOPLAT) as ₹75.3 crores. It then determines the company's invested capital is ₹200 crores based on the equity and debt. The weighted average cost of capital (WACC) is calculated to be 14.1%. Finally, the EVA is determined to be ₹47.1 crores by taking the NOPLAT and subtracting the WACC multiplied by the invested capital.

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    Business Valuation Assignment

    Calculation of EVA (₹ in Crores)

    1) Calculate NOPLAT
    Sales 300

    (-) Operating Cost (195)

    PBIT 105

    (-) Interest (6)

    PBT 99

    (-) Tax @30% (29.7)

    NOPAT 69.3

    +Interest 6

    NOPLAT 75.3

    2) Calculate Invested Capital


    Invested Capital = Equity + Debt
    = 150 + 50 = 200
    Therefore, Invested Capital = 200

    3) Calculate Weighted Average Cost of Capital


    WACC = (Cost of Debt)*(1-Tax Rate)*(Proportion of Debt) + (Cost Of Equity)*
    (Proportion of Equity)
    = 0.12 * (0.7) *(0.25) + 0.16 * (0.75)
    = 0.141
    WACC= 14.1%

    4) Calculate EVA
    EVA = NOPLAT - (WACC*Invested Capital)
    = 75.3 - (0.141*200)
    EVA = 47.1

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