Shareholder Value Added - SVA


DEFINITION of 'Shareholder Value Added - SVA'

A value-based performance measure of a company's worth to shareholders. The basic calculation is net operating profit after tax (NOPAT) minus the cost of capital from the issuance of debt and equity, based on the company's weighted average cost of capital:

Shareholder Value Added (SVA)

BREAKING DOWN 'Shareholder Value Added - SVA'

Using the market value of the company, rather than the accounting-based value in the above calculation, will give the market value added to shareholders.

  1. Weighted Average Cost Of Capital ...

    Weighted average cost of capital (WACC) is a calculation of a ...
  2. Cost Of Capital

    The required return necessary to make a capital budgeting project, ...
  3. Shareholder

    Any person, company or other institution that owns at least one ...
  4. Market Value Added - MVA

    A calculation that shows the difference between the market value ...
  5. Economic Value Added - EVA

    A measure of a company's financial performance based on the residual ...
  6. Net Operating Profit After Tax ...

    A company's potential cash earnings if its capitalization were ...
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  1. What is Shareholder Value Added (SVA) and how is it used in value investing?

    Shareholder value added (SVA) is a performance metric that results from subtracting a corporation's cost of capital from ... Read Full Answer >>
  2. Who is responsible for protecting and managing shareholders' interests?

    The average shareholder, who is typically not involved in the day-to-day operations of the company, relies on several parties ... Read Full Answer >>
  3. Does working capital include salaries?

    A company accrues unpaid salaries on its balance sheet as part of accounts payable, which is a current liability account, ... Read Full Answer >>
  4. What is a profit and loss (P&L) statement and why do companies publish them?

    A profit and loss (P&L) statement, or balance sheet, is essentially a snapshot of a company's financial activity for ... Read Full Answer >>
  5. How do dividends affect the balance sheet?

    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
  6. Are dividends considered an expense?

    Cash or stock dividends distributed to shareholders are not considered an expense on a company's income statement. Stock ... Read Full Answer >>

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