Shareholder Value Added - SVA

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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)

INVESTOPEDIA EXPLAINS '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
  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 >>
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