Economic Value Added --- A General Perspective
AbstractThis 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.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 0504003.
Length: 28 pages
Date of creation: 02 Apr 2005
Date of revision:
Note: Type of Document - pdf; pages: 28. PDF, ~200KB, 28 pages
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Economic Value Added; Corporate Performace;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
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