Economic Value Added (EVA) as an Indicator for Financial Decisions

Cristina Mihaela Onica
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Cristina Mihaela Onica: Dunarea de Jos University of Galati, Romania

Economics and Applied Informatics, 2019, issue 3, 149-156

Abstract: The economic added value is an indicator that represents a performance measurement of the real economic profit obtained by a company, which allows to predict the company’s success or failure over a certain period of time. The use of EVA in the measurement of a company’s financial and economic performances is considered to be better due to the fact that it offers a basis for a comparison between companies, by taking into account both the cost of capital and the company’s degree of risk. The study of economic value became a widely debated issue nowadays because the main objective of any company is maximizing shareholders’profits.

Keywords: Economic added value; Net operating profit; The cost of capital; Performance; Analysis; Capital (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ddj:fseeai:y:2019:i:3:p:149-156

DOI: 10.35219/eai1584040967

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