Factors that influence economic value in the Colombian apparel industry

This work aims at identifying the factors that influenced economic value in the Colombian apparel industry from 2010 to 2016. Financial and economic value-added indicators are analyzed to measure the growth, efficiency, efficacy, and effectiveness of such sector. Financial indicators reveal that the industry was successful because it grew and produced economic yields every year; the annual variability of its effectiveness mainly depended on the efficacy of cost and expense management. However, some Economic Value Added (EVA) was destroyed because the cost of the financial resources exceeded the profitability of the net operating assets, which produced a negative market value added during the seven-year period. EVA destruction was fluctuating, the result of variations in operating profit after tax and capital cost in a context of continuously growing net operating assets. These findings could be confirmed if similar studies were conducted with more homogeneous groups of companies in terms of size, age, and geographic location