Editing Economic value added (section)

{{Short description|Value of a firm's profit after deduction of capital costs}}
{{Corporate Finance}}
{{inline|date=December 2021}}
In [[accounting]], as part of [[financial statements]] analysis, '''economic value added''' is an estimate of a firm's [[economic profit]], or the value created in excess of the [[Required rate of return|required return]] of the [[types of companies|company's]] [[shareholder]]s. EVA is the net profit less the capital charge ($) for raising the firm's capital. The idea is that value is created when the return on the firm's economic capital employed exceeds the cost of that capital. This amount can be determined by making adjustments to [[Generally accepted accounting principles|GAAP]] accounting. There are potentially over 160 adjustments but in practice, only several key ones are made, depending on the company and its industry.