What is EVA i.e Economic Value Added? How it used to know the performance of the business?© BrainMass Inc. brainmass.com December 15, 2020, 11:34 am ad1c9bdddf
The consulting firm of Stern Stewart published The Real Key to Creating Wealth (John Wiley & Sons, New York, 1998) which "celebrates a revolution in management known as economic value added (EVA)." Stern Stewart claims that:
EVA is the only true indicator of business and management performance;
EVA is "today's hottest financial idea and getting hotter";
EVA "allows all financial decisions to be modeled, monitored, evaluated, communicated, and compensated in terms of a single measure"
The Fundamentals of Value Creation
EVA measures ...
This explains the concept of Economic value added and the steps to compute it.