Economic Value Added and its uses in practices

A concept of EVA is critical in evaluating the performance of any business. Economic Value Added refers to the incremental value created by an activity or a business venture. It measures the economic rather than accounting profit created by a business after the cost of all resources including debt and equity had been implied. Improving EVA can be achieved by generating more revenue without using additional capital. The capital invested in the business might be reduced by selling non-operating assets and redeploying the capital into projects and activities with higher operating performance than current projects have. ..