Economic Value Added - a General Perspective
Indian Institute of Techonology Kanpur; Indian Institute of Technology Kanpur
Asish K. Bhattacharyya
Indian Institute of Management (IIM), Calcutta
June 2, 2000
Decision, Volume 27, No.2, July-Dec 2000, Pg25-55
This paper explains the concept of Economic Value Added (EVA) that is gaining popularity in India. The paper examines whether EVA is a superior performance measure both for corporate reporting and for internal governance. It relied on empirical studies in U.S.A. and other advance economies. It concluded that though EVA does not provide additional information to investors, it can be adapted as a corporate philosophy for motivating and educating employees to differentiate between value creating and value destructing activities. This would lead to direct all efforts in creating shareholder value. The paper brings to attention the dangerous trend of reporting EVA casually that might mislead investors.
Number of Pages in PDF File: 28
Keywords: EVA, Economic Value Added, finance, performanceAccepted Paper Series
Date posted: May 13, 2004 ; Last revised: June 3, 2012
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