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