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Healthcare Glossary

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Economic value added (EVA)

EVA (Economic Value Added) is an estimate of true economic profit after making corrective adjustments to Generally Accepted Accounting Principles (GAAP) accounting, including deducting the opportunity cost of equity capital.

The equation for measuring EVA is as follows:
EVA = Net Operating Profit After Taxes (NOPAT) - (Capital * Cost of Capital)

See also:
Cost–benefit analysis
Cost-effective (healthcare economics)
Cost-effectiveness league table (healthcare economics)
Cost-effectiveness threshold (health economics)
Cost-minimisation analysis (CMA)
Cost consequences analysis (CCA)

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