Abstract
Research background: The modern goal of enterprises, value creation, is achieved through the concept of economic profit. Profit, as part of profit or loss, is one of the most important flows, pointing to how efficiently corporate capital is used in an entity (Coatney & Poliak, 2020). The article deals with the difference between accounting and economic profit, the selected form of economic profit - the EVA indicator. The economic value added (EVA) indicator is one of the best-known modern indicators of a company's performance (Siekelova et al., 2019). It shows whether the given entity increases its value or only earns for its economic survival. The benefit of this indicator is the valuation of equity and taking into account the risk. It is difficult to express the economic profit itself, therefore the article also addresses the issue of its calculation (Shah et al., 2016). The company needs to know its financial status and the direction it is heading, so we decided to calculate a selected form of economic profit. Purpose of the article: The company needs to know its financial status and the direction it is heading, so we decided to calculate a selected form of economic profit. When expressing the value of the economic value added indicator, it is also important to know the items and components of the calculation that have the strongest meaning and effect on the possible amount of the indicator. Given this, we decided to use a sensitivity analysis, which points to the effect of individual variables that participate in the construction of the EVA calculation. Methods: In this work, the methods of induction, deduction, and comparison were used to obtain a true picture of the subject issue. Methods of synthesis and analysis of the researched issues were also used. Findings & Value added: In the paper there is pointed out the intensity of the impact of individual variables that entered into the calculation of the economic value added indicator as a dominant indicator of concept of economic profit.
Highlights
Every business unit wants to grow in the global market economy, increase its profits and expand its field of activity in order to grow its wealth from time immemorial (Fialova & Folvarcna, 2020, Moorthi, 2021)
The main goal of sensitivity analysis in our case is to get an overview of the effect of individual variables that participate in the construction of the calculation of a particular indicator
In view of the tables, it can be said that the value of the economic value added (EVA) indicator of the selected company is most affected by variables such as net operating profit after tax, net operating assets, cost of equity, weighted average cost of capital and tangible fixed assets
Summary
Every business unit wants to grow in the global market economy, increase its profits and expand its field of activity in order to grow its wealth from time immemorial (Fialova & Folvarcna, 2020, Moorthi, 2021). The subjects considered the most important increase in profit, which was reported in the accounting records of the entity, later in economic theory, the idea of increasing the value of the company was developed (Kliestik et al, 2020). Businesses have realized that increasing accounting profit is not enough to sustain and grow in a market economy, and so the concept of economic profit has been added to the global corporate economy (Majercak et al, 2013). The concept of economic profit consists of many indicators showing how efficiently a company can manage its assets, especially the indicator of economic value added is a very important apparatus of the concept (Jerabek et al, 2016). Given that economic profit is much more difficult to quantify than accounting profit, companies in the concept need a precise procedure for expressing this indicator (Shad & Lai, 2015; Valaskova et al, 2020)
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