Economic Value Added (EVA) – The Measure of Real Wealth Creation
Economic value added is a concept defined to measure the performance of a firm’s management in creating value or wealth for the shareholders. It can be calculated using a simple formula where cost of capital is deducted from NOPAT. This is also known as economic profit or residual profit. It also has various advantages and disadvantages of EVA as a performance metric.
Post to Tumblr