Shareholder Value Added - SVA

What is 'Shareholder Value Added - SVA'

Shareholder value added (SVA) is 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.

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RELATED FAQS
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    Read about shareholder value added (SVA), a corporate profitability metric, and why value investors disagree about its usefulness. Read Answer >>
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  3. How does Net Operating Profit After Tax give a clearer view of the operating efficiency ...

    Understand how net operating profit after tax gives a clearer view of the operating efficiency of a company in relation to ... Read Answer >>
  4. Why is it beneficial to use Net Operating Profit After Tax as opposed to net income ...

    Understand why it is beneficial to use net operating profit after tax as opposed to net income when making an investment ... Read Answer >>
  5. What is the point of calculating economic value added (EVA)?

    Understand the reason for calculating economic value added, or EVA, as well as the performance it measures. Learn when a ... Read Answer >>
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