SVA is a performance metric that subtracts a corporation's cost of capital from its net operating profit after tax to measure profitability and management efficacy. Some value investors use SVA to judge corporations in line with value-based management, which assumes a corporation's foremost goal should be maximizing economic value for shareholders.

5. Shareholder Value Added
• A Shareholder value added (SVA) is a performance metric that results
from subtracting a corporation's cost of capital from its net operating
profit after tax. Some value investors use SVA as a tool to judge the
corporation's profitability and management efficacy. This line of
thinking runs congruent with value-based management, which
assumes that the foremost consideration of a corporation should be
to maximize economic value for its shareholders.
•