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Technical note
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Reference no. 197-002-6
Subject category: Economics, Politics and Business Environment
Authors: S David Young (INSEAD)
Published by: INSEAD
Published in: 1997
Length: 23 pages
Share a link: https://casecent.re/p/8516
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Abstract

Economic Value Added (EVA) measures the difference between the return on a company''s capital and the cost of that capital. A positive EVA indicates that value has been created for shareholders; a negative EVA signifies value destruction. The purpose of this note is to discuss: (1) why EVA has generated so much attention lately; (2) how EVA is calculated; (3) the most common accounting adjustments made by EVA practitioners; and (4) the application of EVA to divisional performance measurement.
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Abstract

Economic Value Added (EVA) measures the difference between the return on a company''s capital and the cost of that capital. A positive EVA indicates that value has been created for shareholders; a negative EVA signifies value destruction. The purpose of this note is to discuss: (1) why EVA has generated so much attention lately; (2) how EVA is calculated; (3) the most common accounting adjustments made by EVA practitioners; and (4) the application of EVA to divisional performance measurement.

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Sorry, this product has no related items.