Economic Value Added Performance Measurement Training Course

Course overview

Finance teams can report rising EBIT, EPS, or budget attainment while capital remains tied up in assets, acquisitions, inventory, and receivables that earn less than their funding cost. This disconnect makes it difficult to distinguish profitable growth from value destruction, challenge investment proposals, and set business-unit targets that reflect shareholder returns. Economic Value Added (EVA) addresses this gap by measuring operating profit after tax less a charge for the capital employed to generate it.

This five-day course teaches participants to calculate, interpret, and govern EVA as a practical performance-management method. Participants build NOPAT from reported financial statements, determine invested capital, estimate a weighted average cost of capital (WACC), and apply the EVA formula consistently across business units. They examine accounting adjustments for items such as R&D, operating leases, provisions, goodwill, and deferred tax, then compare EVA with ROI, ROCE, residual income, EBITDA, and conventional budget measures. The course also covers value-driver trees, target setting, investment appraisal, incentive design, and management reporting.

Delivery combines instructor-led explanation with spreadsheet modelling, worked financial statements, team case analysis, and management-review simulations. Participants use a realistic divisional case to create an EVA model, test operational and investment scenarios, and prepare an executive EVA dashboard with supporting assumptions. Each participant leaves with an EVA measurement workbook, a documented calculation methodology, and an implementation plan that can be adapted to their own organisation's reporting cycle.

The course is suited to finance professionals and operational leaders who need a more rigorous basis for assessing whether projects, products, divisions, and capital-allocation decisions are genuinely creating economic value.

Course objectives

By the end of this course, participants will be able to:

• Calculate EVA using NOPAT, invested capital, and a capital charge
• Build a divisional EVA model in Microsoft Excel from financial-statement data
• Derive NOPAT by separating operating performance from financing effects
• Calculate invested capital and reconcile it to the balance sheet
• Estimate WACC using cost of debt, cost of equity, capital structure, and tax assumptions
• Apply material EVA accounting adjustments for R&D, leases, provisions, goodwill, and deferred tax
• Compare EVA with ROCE, ROI, EBITDA, residual income, and budget variance measures
• Design an EVA dashboard and implementation plan for management performance reviews

Benefits of attending

Target competencies

Who should attend

• Finance Directors and Controllers — who need a value-based measure for business-unit performance and capital discipline
• FP&A Managers — who translate plans, forecasts, and operating results into management decision support
• Corporate Finance and Treasury Managers — who assess WACC, capital structure, investments, and funding decisions
• Business Unit Finance Managers — who must explain whether divisional profit exceeds its cost of capital
• Investment Analysts and Corporate Development Professionals — who evaluate acquisitions, projects, and portfolio returns
• Operations and General Managers — who control working capital, assets, and operating decisions that affect EVA

Requirements and prerequisites

Participants should be comfortable reading an income statement, balance sheet, and cash flow statement, and should understand basic concepts including EBIT, tax, depreciation, working capital, debt, equity, and return on capital. Practical confidence with Microsoft Excel formulas, cell references, and simple charts is expected because exercises involve building and testing an EVA model. Prior experience of WACC, CAPM, valuation, or EVA is not required; these methods are taught from first principles. Participants do not need programming, advanced financial modelling, or specialist valuation software.

Training methodology

The course uses short instructor-led sessions to establish the EVA framework, followed by guided Excel modelling using a common company case. Participants reconstruct NOPAT and invested capital from financial statements, debate which accounting adjustments are material, calculate WACC, and test the effect of operational and investment decisions on EVA. Small groups present divisional findings in simulated management-review meetings. On the final day, participants adapt the calculation logic, reporting cadence, and governance controls into an EVA application plan for their own organisation.

Course outline

Day 1: EVA foundations and value-based performance

• Economic Value Added formula and interpretation
• Profit versus economic profit
• The capital charge concept
• EVA, residual income, and shareholder value
• Comparison of EVA, ROI, ROCE, EBITDA, and EPS
• Operating value drivers and capital efficiency
• EVA measurement scope for projects, products, and business units

Workshop: Participants analyse a divisional performance case and produce a first-pass calculation showing why reported profit and EVA can give different conclusions.

Day 2: Building NOPAT and invested capital

• Extracting EVA inputs from published financial statements
• Converting EBIT into net operating profit after tax
• Separating operating items from financing items
• Invested capital calculation from operating assets and liabilities
• Working capital treatment in EVA
• Treatment of fixed assets, depreciation, and capital expenditure
• Balance-sheet reconciliation and data-quality controls

Workshop: Participants build a reconciled NOPAT and invested-capital schedule in Excel from a case company's income statement and balance sheet.

Day 3: Cost of capital and EVA accounting adjustments

• Weighted average cost of capital structure
• Cost of debt and after-tax borrowing cost
• Cost of equity using the Capital Asset Pricing Model
• Capital structure weights and market-value assumptions
• Research and development capitalisation adjustments
• Lease, provision, goodwill, and deferred-tax adjustments
• Materiality thresholds and adjustment governance

Workshop: Participants calculate WACC and apply selected accounting adjustments to produce an adjusted EVA result for the case division.

Day 4: Using EVA for decisions and performance management

• EVA value-driver trees
• Linking sales growth, margin, asset turns, and capital charge
• EVA-based investment appraisal and scenario analysis
• Acquisition and disposal decision applications
• Business-unit target setting and benchmarking
• EVA-informed incentive design and behavioural risks
• Management reporting narratives for EVA performance

Workshop: Teams test pricing, working-capital, capital-expenditure, and acquisition scenarios, then recommend the option with the strongest EVA outcome.

Day 5: EVA reporting, governance, and implementation

• Designing an EVA dashboard for executive review
• Monthly and quarterly EVA reporting cycles
• Data ownership, source systems, and model controls
• Documenting calculation policies and assumptions
• EVA variance analysis and forecast updates
• Communicating EVA to non-financial managers
• Phased EVA implementation roadmap

Workshop: Participants complete an EVA measurement pack containing an Excel model, dashboard prototype, calculation policy, and 90-day implementation plan.

Tools & standards covered

Microsoft Excel, Microsoft Power BI, IFRS Accounting Standards, US GAAP

A typical training day

Live online deliveries follow the same structure in the East Africa Time zone, with shorter screen blocks and longer breaks.

What the fee includes

How you can take this course

Certification

Participants who complete the full five days receive the Skillset Development Certificate of Completion, stating the course title, course code, dates and delivery format — suitable for professional-development records and employer reimbursement.

Frequently asked questions