EVA is an accounting-based measure of operating performance. Proponents of EVA argue that EVA is a superior measure as compared to other performance measures. EVA as a performance measure Jooks into the efficacy of EVA both as an absolute measure in comparison with net income, residual income and other similar measures as weJI as a ratio in relation with performance measures like ROE, ROA and Operating Profit Margin, which are commonly used by both managers and equity analysts alike.
EVA has made a position for itself not only in the Western business community but also in the Indian Corporate Sector. And the recognition of this concept in India is gradually picking up and it is expected that in future, more and more companies will start relying upon this new measure of financial performance. |
