Journal of Accounting and Management Information Systems (JAMIS)

Economic Value Added (EVA) – an indicator of the company strategy

10/2004 ,   p143..150

Monica PETCU

Keywords:   EVA, competitive benefits, value setting up, financing the increase, the average weighted cost of the share capital

The main utility of the financial indicator can be found in the reasoning regarding the share capital distribution. In the event of limited financial resources and constraints imposed by the globalization of the economic social, financial phenomena, the company management should have as main object the setting up of the value. EVA represents a reference indicator for evaluating the company value, in drawing up business plans and in monitoring the performances. Introducing the value management within the strategic development of a company presupposes the substantiation of a financial strategy matrix, using as variables: ability to set up value (assessed based on the difference between the profit rate of the invested share capital and the average weighted cost of the share capital) and the capacity to self-finance the increase (assessed based on the difference between the sales increase rate and the self-financing increase rate).