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. Economic Value Added - EVA

    A measure of a company's financial performance based on the residual ...
  5. Market Value Added - MVA

    A calculation that shows the difference between the market value ...
  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. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  4. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  5. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  6. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>

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