In corporate finance, Economic Value Added (EVA) is an estimate of a firm's economic profit, or the value created in excess of the required return of the company's shareholders.

The Economic Value Added (EVA) equal to:

EVA = EBIT × (1-T) – WACC × Total Capital

Where:

EBIT = Earnings Before Interest and Taxes

T = Tax Rate

WACC = Weighted Average Cost of Capital

Total Capital = Total Assets

For example, if EBIT = 250,000 ; T = 25% ; WACC = 10%; Total Capital = 1,000,000;

The EVA equals 87,500, which means that the firm had created a wealth of 87,500 dollars to it's share holders

(EVA = 250,000 × (1-0.25) – 0.1 × 1,000,000)