One significant advantage of economic value added (EVA)is that it clearly specifies what specific actions managers should or should not take in order to improve financial performance.

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Economic Value Added (EVA) is a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit, adjusted for taxes on a cash basis. While EVA can indicate whether a company is creating value, it does not specify what specific actions managers should take to improve financial performance. Managers must analyze the components of EVA and other business aspects to determine specific actions.

One Significant Advantage of Economic Value Added (EVA)is That It