Abstract

http://ssrn.com/abstract=1439008
 
 

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Economic Value Added and Systemic Value Added: Symmetry, Additive Coherence and Differences in Performance


Roberto Ghiselli Ricci


Università degli Studi di Sassari

Carlo Alberto Magni


University of Modena and Reggio Emilia - Department of Economics

May 2006

Applied Financial Economics Letters, Vol. 2, No. 3, pp. 151-154, May 2006

Abstract:     
Two measures of excess profit (residual income) are currently available in the literature: the standard one, of which Economic Value Added (EVA) (Stewart, 1991) is a major instantiation, and Systemic Value Added (SVA) (Magni, 2003, 2004, 2005), also named lost-capital residual income (Magni, 2009a,b). This paper shows that, unlike EVA, SVA is symmetric and additively coherent. Also, EVA and SVA are not simply different in value but also convey different information about good or bad performances.

Number of Pages in PDF File: 8

Keywords: excess profit (residual income), EVA, SVA, performance measurement

JEL Classification: M41, G11, G12, G31

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Date posted: July 26, 2009  

Suggested Citation

Ghiselli Ricci, Roberto and Magni, Carlo Alberto, Economic Value Added and Systemic Value Added: Symmetry, Additive Coherence and Differences in Performance (May 2006). Applied Financial Economics Letters, Vol. 2, No. 3, pp. 151-154, May 2006. Available at SSRN: http://ssrn.com/abstract=1439008

Contact Information

Roberto Ghiselli Ricci
Università degli Studi di Sassari ( email )
Sassari
Italy
Carlo Alberto Magni (Contact Author)
University of Modena and Reggio Emilia - Department of Economics ( email )
Viale Berengario 51
Modena, Modena 41121
Italy
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