EVA for Small Manufacturing Companies
نویسندگان
چکیده
This paper examines introducing Economic Value Added as a performance measure for small manufacturing companies. Advantages and disadvantages of using Economic Value Added as a primary measure of performance as compared to sales, revenues, earnings, operating profit, profit after tax, and profit margin are investigated. The Economic Value Added calculation using data from a small company’s income and balance sheet statements is illustrated. Necessary adjustments to these financial statements, that are typical for a small company, are demonstrated to prepare the data for the Economic Value Added determination. Finally, potential improvement opportunities resulting from using Economic Value Added as a performance measure in small manufacturing companies are discussed.
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