Economic Value Added (EVA): A Literature Review
Md. Zahedul Islam, Md. Thasinul Abedin, & Md. Sharif Hossain
Traditional accounting based performance measures fail to assess the true economic return of a firm. In this regard Economic Value Added (EVA) reflects true economic profit of a firm. This paper explores the role, limitations, foundation, computation of economic value added (EVA) from the established literature. In addition, this paper addresses the key adjustments into residual earnings to reach into EVA. Finally a few numerical examples to introduce key adjustments have been provided. However, there are some other adjustments that are not addressed in this paper. Hence, considering all the financial adjustments in computing EVA can make the paper more worthy of knowledge sharing and dissemination. EVA is termed as a better performance measure across the firms.
Key words: Economic Value Added, Economic Profit, Financial Adjustments, Performance Measure, Residual Earnings.
|Title:||Investment in Government Securities by State-owned Commercial Banks|
|Author:||Md. Zahedul Islam, Md. Thasinul Abedin, & Md. Sharif Hossain|
|Journal Name:||International Journal of Science and Business|
|ISSN:||ISSN 2520-4750 (Online), ISSN 2521-3040 (Print)|
|Media:||Online & Print|
|Date of Publication:||18/10/2019|
|Paper Type:||Literature Review|
Cite This Article:
Md. Zahedul Islam, Md. Thasinul Abedin, & Md. Sharif Hossain (2019). Economic Value Added (EVA): A Literature Review, International Journal of Science and Business, 3(1), 274-285. doi: https://doi.org/10.5281/zenodo.3522161
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About Author (s)
Md. Zahedul Islam, Lecturer, Department of Accounting, University of Chittagong.
Md. Thasinul Abedin (corresponding author), Assistant Professor, Department of Accounting, University of Chittagong.
Md. Sharif Hossain, Professor, Department of Accounting & Information Systems, University of Dhaka.