KKPI Formulas
Finance KPI Formula

WACC Formula

WACC, or Weighted Average Cost of Capital, estimates the blended cost of equity and debt financing.

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Simple formula

(E/V × Re) + (D/V × Rd × (1 - Tax Rate))

The formula uses these inputs:

  • Equity Value: enter your value in the calculator or spreadsheet.
  • Debt Value: enter your value in the calculator or spreadsheet.
  • Cost of Equity: enter your value in the calculator or spreadsheet.
  • Cost of Debt: enter your value in the calculator or spreadsheet.
  • Tax Rate: enter your value in the calculator or spreadsheet.

Excel formula

Use this Excel formula as a starting point. Replace the sample cell references with the cells in your worksheet.

=IFERROR((B2/(B2+C2))*D2+(C2/(B2+C2))*E2*(1-F2),0)

Google Sheets formula

In most cases, the Google Sheets version uses the same structure as Excel.

=IFERROR((B2/(B2+C2))*D2+(C2/(B2+C2))*E2*(1-F2),0)

Power BI DAX measure

Use this DAX pattern as a starting point and rename measures or columns to match your Power BI model.

WACC =
VAR EquityValue = [Equity Value]
VAR DebtValue = [Debt Value]
VAR TotalCapital = EquityValue + DebtValue
RETURN
    DIVIDE(EquityValue, TotalCapital) * [Cost of Equity]
    + DIVIDE(DebtValue, TotalCapital) * [Cost of Debt] * (1 - [Tax Rate])

SQL example

This generic SQL pattern can be adapted to your warehouse table names and column names.

SELECT
    /* replace with your formula */ AS wacc
FROM kpi_data;

WACC calculator

Result—

How to interpret WACC

Use this KPI with trend data, targets, and related metrics. A single value is less useful than a consistent definition tracked over time.

Important: KPI definitions can vary by company, accounting policy, analytics platform, or reporting standard. Keep the definition consistent when comparing periods.

Common mistakes

  • Typing WAAC when you mean WACC.
  • Using book values when market values are required for your analysis.
  • Forgetting the after-tax adjustment on cost of debt.

Related KPI formulas

Frequently asked questions

What is the WACC formula?

The common WACC formula is: (E/V × Re) + (D/V × Rd × (1 - Tax Rate)).

How do you calculate WACC in Excel?

Use this Excel formula pattern: =IFERROR((B2/(B2+C2))*D2+(C2/(B2+C2))*E2*(1-F2),0). Replace the cell references with your own data.

Can this KPI be calculated in Power BI?

Yes. Use the DAX measure on this page as a starting point and adjust table and column names to match your model.