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    EVA Net Operating Profit After Taxes (NOPAT) - (Capital Cost of Capital)

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    EvanEl'Lestat
    The document discusses various methods for analyzing a company's financial performance and value, including Economic Value Added (EVA), Market Value Added (MVA), and Wealth Added Index (WAI). It notes that non-financial analyses of a company's policies, credibility, and human capital can strongly impact financial analyses by determining effectiveness, brand position, and transparency. A good analyst considers multiple perspectives in conducting contemporary financial and non-financial analyses.

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    EVA Net Operating Profit After Taxes (NOPAT) - (Capital Cost of Capital)

    Uploaded by

    EvanEl'Lestat
    27 views2 pages
    The document discusses various methods for analyzing a company's financial performance and value, including Economic Value Added (EVA), Market Value Added (MVA), and Wealth Added Index (WAI). It notes that non-financial analyses of a company's policies, credibility, and human capital can strongly impact financial analyses by determining effectiveness, brand position, and transparency. A good analyst considers multiple perspectives in conducting contemporary financial and non-financial analyses.

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    The document discusses various methods for analyzing a company's financial performance and value, including Economic Value Added (EVA), Market Value Added (MVA), and Wealth Added Index (WAI). It notes that non-financial analyses of a company's policies, credibility, and human capital can strongly impact financial analyses by determining effectiveness, brand position, and transparency. A good analyst considers multiple perspectives in conducting contemporary financial and non-financial analyses.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    27 views2 pages

    EVA Net Operating Profit After Taxes (NOPAT) - (Capital Cost of Capital)

    Uploaded by

    EvanEl'Lestat
    The document discusses various methods for analyzing a company's financial performance and value, including Economic Value Added (EVA), Market Value Added (MVA), and Wealth Added Index (WAI). It notes that non-financial analyses of a company's policies, credibility, and human capital can strongly impact financial analyses by determining effectiveness, brand position, and transparency. A good analyst considers multiple perspectives in conducting contemporary financial and non-financial analyses.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Rapidly change global environment of economy today demand the deeper analysis

    of financial statement that recently being a must for analyst to recognize any kind of
    possible analysis, financial or non-financial one. A good analyst not only see the one
    perspective, the evaluation it is the contemporary analysis that more advance than before.

    Economic Value Added (EVA):


    Economic Value Added (EVA), is an estimate of a firm's economic profit,
    being the value created in excess of the required return of the company's investors
    (being shareholders and debt holders). In the simple way, EVA is the profit earned
    by the firm less the cost of financing the firm's capital. The idea is that value is
    created when the return on the firm's economic capital employed is greater than
    the cost of that capital.
    EVA= Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of Capital)
    NOPAT is profits derived from a companys operations after cash taxes but
    before financing costs and non-cash bookkeeping entries. It is the total pool of
    profits available to provide a cash return to those who provide capital to the firm.
    This evaluation will show the value added for a company although from the
    profit or loss and other sources.

    Market Value Added (MVA):


    Market Value Added (MVA) is the difference between the current market
    value of a firm and the capital contributed by investors. If MVA is positive, the firm
    has added value. If it is negative, the firm has destroyed value. The amount of value
    added needs to be greater than the firm's investors could have achieved investing in
    the market portfolio, adjusted for the leverage (beta coefficient) of the firm relative
    to the market.
    The formula for MVA is:

    Wealth Added Index (WAI):


    Wealth in these theory only recognize the wealth only if the returns is a lot
    of bigger than the cost of equity to available the on risk free securities such as
    government bonds because the company is riskier.

    Those measurement is completed with another analysis which are non financial analysis
    and also human capital that strongly affect the company either to expand and sustain in
    the market. Companys policy could be the great impact of the effectiveness and effectively
    that can be determined the companys policy and brand position. Human capital such as
    management credibility is the measurement by stakeholder point of view, it is the matters
    of how the managers behave and the transparency of the financial statement. Human
    investment has become the important measure.

    Question:
    1. How the non financial analysis can effect great in the financial analysis?

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