Economic value added (EVA)

Aug 11, 2020
1 min read

Economic value added (EVA) is a corporate performance measure that stresses the ability to achieve returns above the firm's cost of capital. It is often stated as net operating profits after tax less the product of required capital times the firm's weighted average cost of capital. [Source: Casualty Actuarial Society (CAS) Overview of Enterprise Risk Management]

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Risk-adjusted return on capital (RAROC)

Risk-adjusted return on capital (RAROC) is a target return on equity (ROE) measure in which the numerator is reduced depending on the risk associated with the instrument or project. In insurance indu

Risk-adjusted return on risk-adjusted capital (RARORAC)

Risk-adjusted return on risk-adjusted capital (RARORAC) is a combination of Risk-adjusted return on capital (RAROC) and Return on risk-adjusted capital (RORAC) in which both the numerator and denomina

Return on risk-adjusted capital (RORAC)

Return on risk-adjusted capital (RORAC) is a target return on equity (ROE) measure in which the denominator is adjusted depending on the risk associated with the instrument or project. [Source: Casu

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Economic value added (EVA)

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