Economic Value Added - Index of Companies’ Internal Performance

Mariana Man and Emilia Vasile ()
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Mariana Man: University of Petroşani, Romania

Annals of the University of Petrosani, Economics, 2009, vol. 9, issue 2, 115-120

Abstract: Value added displays various opportunities for measuring and evaluating performance; it is the key element in determining certain indices that create value having a major significance within a company’s activity, either quoted or not on capital market. In case of quoted companies, value creation is the main criterion of performance evaluation by shareholders whose strategic objective is maximizing present and future profits. In order to carry out such an objective, the value created for shareholders can be measured through a system of indices that allow the determination of the value created during a financial exception or as compared with a certain reference period. The economic index Value Added (EVA) is relevant in quantifying a company’s capacity of creating value for capital suppliers.

Keywords: performance; economic value added; invested capital; capital cost; net operating profit after taxes; weighed average cost of capital; real economic profit (search for similar items in EconPapers)
Date: 2009
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