Skip to content

EV vs EVA vs MVA

May 27, 2017

EV = Enterprise Value

EV = Market Value of Common Equity, Preferred Shares & Debt – Cash & Cash Equivalents & Short Term Investments like marketable securities

EVA = Economic Value Added

EVA = EBIT(1-tax) – $WACC

$WACC = WACC * Invested Capital

MVA = Market Value Added

MVA = Market Value of total Capital – Book Value of Capital

Capital = Debt plus Equity basically L + SE

Advertisements

From → Asset Valuation

3 Comments
  1. Aram permalink

    Isn’t it a market value of the debt?

  2. For MVA? I looked it up… let me look it up again online. Another blogger says:
    http://cfaglossary.blogspot.com/2011/04/economic-value-added-eva-and-market.html

    But because if you define “Capital” as Debt plus Equity or L+SE then yes it is (Market Value of Equity plus Market Value of Debt) – (Book Value of Equity plus Book Value of Debt) but it has to all fit on one flashcard, sometimes when I’m in a hurry doing practice problems I have calculated EVA instead of EV and I saw a practice question once that asked for EVA vs MVA so knowing how to calculate all three is testable and potentially confusing.

    It all had to fit on one flashcard.

Trackbacks & Pingbacks

  1. Another CFA® Exam is Finished – Muskblog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: