Economic Value Added Break Even Point of Commercial Banks

Abstract

Economic value added (EVA) is an estimate of a firm’s economic profit, or the value created in excess of the required return of the company’s shareholders. Economic Value Added is the net profit, less the equity cost of the firm capital. The idea is that value is created when the return of the firm’s economic capital employed exceeds the cost of the capital. The amount can be determined by making adjustments to Generally Accepted Accounting Principle accounting. This article aims to measure the Economic Value Added breakeven point of commercial banks in India.