On financial terms
2007-01-21 18:27:45 · 3 answers · asked by jegancwa 1 in Business & Finance ➔ Other - Business & Finance
Economic Value Added (EVA) is often defined as the value of an activity that is left over after subtracting from it the cost of executing that activity and the cost of having lost the opportunity of investing consumed resources in an alternative activity. In business terms, one could calculate EVA as Income from Operations - rate of interest in sovereign debt, if sovereign debt can be considered an alternative opportunity to invest working capital and equity.
2007-01-21 18:38:09 · answer #1 · answered by sax2003dude 3 · 0⤊ 0⤋
EVA is the addition in the value of net worth of an entity compared with previous year.
e.g
Net worth as on 31-3-06 = 50
Net worth as on 31-3-05 = 40
Therefore the EVA will be 50-40 i.e 10
2007-01-22 06:29:54 · answer #2 · answered by microeyes 1 · 0⤊ 0⤋
Put most simply, EVA is net operating profit minus an appropriate charge for the opportunity cost of all capital invested in an enterprise. As such, EVA is an estimate of true "economic" profit, or the amount by which earnings exceed or fall short of the required minimum rate of return that shareholders and lenders could get by investing in other securities of comparable risk.
2007-01-22 02:38:57 · answer #3 · answered by Eva 5 · 0⤊ 0⤋