The more economic value added the more successful the firm.

Question

Quizplus · Accepted Answer

Economic value added (EVA) is a measure of a company's financial performance that is based on the residual wealth calculated by deducting the cost of capital from its operating profit, adjusted for taxes on a cash basis. The higher the EVA, the more successful the firm is considered to be because it is generating a greater amount of profit after accounting for the cost of financing its operations.

The More Economic Value Added the More Successful the Firm