where 
special considerationsthe equation for eva shows that there are three key components to a company s eva nopat the amount of capital invested and the wacc nopat can be calculated manually but is normally listed in a public company s financials capital invested is the amount of money used to fund a company or a specific project wacc is the average rate of return a company expects to pay its investors the weights are derived as a fraction of each financial source in a company s capital structure wacc can also be calculated but is normally provided the equation used for invested capital in eva is usually total assets minus current liabilities two figures easily found on a firm s balance sheet in this case the modified formula for eva is nopat total assets current liabilities wacc as noted by stern value management in 1983 the management team developed eva a new model for maximizing the value created that can also be used to provide incentives at all levels of the firm the goal of eva is to quantify the cost of investing capital into a certain project or firm and then assess whether it generates enough cash to be considered a good investment a positive eva shows a project is generating returns in excess of the required minimum return advantages and disadvantages of evaeva assesses the performance of a company and its management through the idea that a business is only profitable when it creates wealth and returns for shareholders thus requiring performance above a company s cost of capital eva as a performance indicator is very useful the calculation shows how and where a company created wealth through the inclusion of balance sheet items this forces managers to be aware of assets and expenses when making managerial decisions however the eva calculation relies heavily on the amount of invested capital and is best used for asset rich companies that are stable or mature companies with intangible assets such as technology businesses may not be good candidates for an eva evaluation 