A VALUE-CREATING COMPARATIVE PERFORMANCE ANALYSIS IN THE CONTEXT OF ECONOMIC ADDED VALUE

Abstract

The economic added value is an indicator that represents a performance measurement of the real economic profit obtained by a company, which allows to predict the company’s success or failure over a certain period of time. The use of EVA in the measurement of a company’s financial and economic performances is considered to be better due to the fact that it offers a basis for a comparison between companies, by taking into account both the cost of capital and the company’s degree of risk. The study of economic value became a widely debated issue nowadays because the main objective of any company is maximizing shareholders’profits.