Economic Value-Added for Accounting and Finance Professionals

The concept of Economic Value-Added (EVA) has grown in popularity over the last ten years and is now seen as possibly the only credible and incorruptible basis for advanced financial statement analysis. EVA has the potential to become the major standard for measuring corporate performance replacing the familiar measures of EBIT and EBITDA. EVA reinforces the idea of the ratio of cash flow returns on capital and cash flow volatility (risk) in place of Earnings per Share (EPS) and Beta (risk).

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