Reference no: EM131765306
Calculate Return on Investment (ROI) and Economic Value Added (EVA).
Use the following data for Eastern Investments Company to calculate ROI and EVA for 2013 and 2014. Analyze the results.
Eastern Investments 2013 2014
Sales $325,000,000 $395,000,000
Net Operating Profit After Tax $55,000,000 $60,000,000
Net Income $35,000,000 $42,000,000
Invested Capital $125,000,000 $145,000,000
Adjusted Average Invested Capital $350,000,000 $380,000,000
Cost of Capital 11% 11%
Required:
- Calculate ROI for 2013 and 2014
- Calculate EVA for 2013 and 2014
- Is Eastern Investments performance improving year on year? Why?
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