Application of the Economic Value Added Model on Determination of the Value of Businesses

Abstract

The EVA index contains many important aspects of the business processes: the size and composition if the invested capital (sum of the equity capital and the loan capital on interest), the costs of the equity capital and loan capital on interest and the efficiency of the profitability of the invested capital. In the near future the EVA index will come to the fore compared to other indexes because it describes the objective business position. It gives considerable information of the performance of the business.

Keywords

• Economic Value Added Model
• Value of Business