p5 EVA adjustment of capital employed

Aaeiou12y ago

Sir Is there any adjustment of other non cash expenses in capital employed? It is getting me confuse because there was an adjusment of other non cash expenses in december 2012 stillwater services question .but alpha division dec. 2007 question 2 does not adjusted other non cash expenses . Please help me and tel me the reason behind this. thanks

NTNeeds to pass12y ago#1

Hi I think you need to be a bit clearer in your question....provisions is an example of the adjustment that will affect capital employed, e.g. provision for bad debt for the year will need to be added back to NOPAT (only the year provision) and the entire (balance sheet value) provision will need to be added back to capital employed. EVA tends to view provisions with suspicion

FFlorence12y ago#2

HI, is Capitalisation also need to add back to Capital employed? Is entire provision or the amount charge to the current year?

NTNeeds to pass12y ago#3

You add back the YEAR provisions to NOPAT You can back the ENTIRE BALANCE SHEET VALUE to capital employed Otherwise you can manipulate EVA by increasing or decreasing the provisions in the financial statements.

FFonyuy6y ago#4

Hi I am phase with a question where provision at the beginning of the year is greater than that at the end of the year so I don't know if there is need for adjustment given that it will be negative