Economic value added

 While calculating EVA we required operating capital. 

I want to know whether Secured loans and Unsecured loans are included in operating capital ??

Replies (3)

 Is there no one on CACLUBINDIA who can reply this query ?

secured loans generally.. long term loans... whereas unsecured loans are nt...

so that only secured loans are included in computing operating capital... 

Sorry but I am a lil confused , isnt working capital and operating capital the same?

 

For calculating EVA don't we calculate it as

net operating profit after tax - capital charge

(capital charge being WACC X net assets)

 

and other one being

(ROI - Ko ) X net assets/capital investment ?

 

for WACC/Ko we use both secured and insecured liabilities

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