Which one of the following may be the best measure of company performance since it accounts for the opportunity cost of capital?

Question

Quizplus · Accepted Answer

EVA stands for Economic Value Added, which is a performance metric that takes into account the cost of capital. It subtracts the capital cost of a company's operations from the return on invested capital. EVA is considered a better measure of company performance than net income or increase in sales, which do not consider the cost of capital. The current ratio, while important for measuring short-term liquidity, does not account for long-term profitability or the company's cost of capital.

Which One of the Following May Be the Best Measure