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Why is EVA also useful for small companies (even with less than 100 employees) ?
- Traditional performance measures used by small companies, such as sales or profits alone, are unable to
describe the company´s true business results and sometimes lead to wrong business decisions
- EVA calculation is simple, since only main data contained in income statement and balance sheet is needed
- EVA reflects company’s performance in dollars
- Positive EVA indicates value creation
- Negative EVA indicates value destruction
- Series of negative EVA is a signal that restructuring in a company may be needed
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