EXCEL International Journal of Multidisciplinary Management Studies
  • Year: 2013
  • Volume: 3
  • Issue: 1

Economic value added (EVA)-A financial performance measure

  • Author:
  • K. Krishna Kumar, P. Tamilselvan
  • Total Page Count: 7
  • Page Number: 90 to 96

*Assistant Professor, Department of Commerce, Periyar University, Salem, Tamil Nadu, India

**Research Scholar, Department of Commerce, Periyar University, Salem, Tamil Nadu, India

Online published on 18 June, 2013.

Abstract

Economic Value Added (EVA) is a developing concept for measuring financial performance of an Enterprise. This would lead to direct all efforts in creating Shareholders Value (SHV).That the concept becoming popular only after marketed by Stern Stwart & Co of New York based Auditing firm (1991). It is a method of calculating economic profit (Residual Income) by examining the components of Economic Value Added (EVA) and the calculation requires an understanding of its underlying principles. The study examines whether EVA is a superior performance measure both for corporate reporting and for internal governance.

Keywords

Cost of Capital, Economic Value Added Operating Profit, Economic Profit, Market Value Added, Return on Investment, Shareholders Value