Economic Value Added - a General Perspective

Decision, Volume 27, No.2, July-Dec 2000, Pg25-55

28 Pages Posted: 13 May 2004 Last revised: 3 Jun 2012

See all articles by Phani BV

Phani BV

Indian Institute of Technology Kanpur

Asish K. Bhattacharyya

Nonlinear Insights ; Shiv Nadar University; Shiv Nadar University

Date Written: June 2, 2000

Abstract

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.

Keywords: EVA, Economic Value Added, finance, performance

Suggested Citation

Bollempalli, Venkata Phani and Bhattacharyya, Asish K., Economic Value Added - a General Perspective (June 2, 2000). Decision, Volume 27, No.2, July-Dec 2000, Pg25-55, Available at SSRN: https://ssrn.com/abstract=545444 or http://dx.doi.org/10.2139/ssrn.545444

Venkata Phani Bollempalli (Contact Author)

Indian Institute of Technology Kanpur ( email )

IME, IIT Kanpur
Kanpur, Uttar Pradesh 208016
India
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+91-512-2597553 (Fax)

HOME PAGE: http://iitk.ac.in/new/b-v-phani

Asish K. Bhattacharyya

Nonlinear Insights ( email )

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HOME PAGE: http://nonlinear-insights.com

Shiv Nadar University ( email )

Shiv Nadar University ( email )

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