Economic Value Added to Improve Financial Statement Reporting
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How can Economic Value Added (EVA) statements be used to improve financial statement reporting, results, and success? What are some problems found with EVA?
References so far that i have found on the subject.
http://www.evanomics.com/evastudy.shtml
http://faculty.cbpa.drake.edu/dodd/research/mbaa/article.html.
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The solution discusses the economic value added used to improve financial statement reporting.
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Economic Value Added (EVA)
How can Economic Value Added (EVA) statements be used to improve financial statement reporting, results, and success? What are some problems found with EVA?
Economic Value Added (EVA) is defined as the measurement of how a company's performance is based in terms of its economic profit or based on the residual wealth as calculated by the subtraction of the company's cost of capital from its net operating profit which has been adjusted for taxes on a cash basis (Economic Value Added1).
From a traditional perspective, most financial reporting was measured from an angle of accounting earnings much as the equity valuation theory maintained that stock prices were as a result of future cash flows. Advocates for accounting earnings claim that knowledge regarding the earnings of an organization is a more efficient indicator of both its present and future ability to make cash flows rather than information on simply cash receipts and payments. Such information regarding the earnings of an organization as ...
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