What is economic value added in strategic manament?
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What is Economic Value Added - EVA. Economic value added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis. If the total economic value added remains negative, the business should be shut down. To calculate economic value added, determine the difference between the actual rate of return on assets and the cost of capital, and multiply this difference by the net investment in the business.
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Investopedia Economic value added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis.
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