Value addition is at the core of managing and utilising the finances of a business. Conventionally it has been understood in terms of profit generation which has been measured by calculating the ROI or EPS or any other profitability ratio. However, such a way to understand value creation presents a one sided picture, in that it does not consider the overall cost of capital which has been used to generate the returns. In 1990, the Stern Stewart & Co. chose to look back at the old basics given by Alferd Marshal and came up with a tool called Economic Value Added (EVA), which is simply the...
Value addition is at the core of managing and utilising the finances of a business. Conventionally it has been understood in terms of profit generati...
