Abstract
Sustainability assessments should be based on financial and non-financial indicators. To describe the financial situation of companies and to calculate the actual economic profit of a company, the Economic Value Added methodology appears as a suitable solution. The aim of the paper is to apply the Economic Value Added methodology to real-life corporate data and present the company’s value through a case study. This study is based on information that was gathered through an extensive literature review (research publications and research studies (documents) about sustainability, corporate social responsibility, Sustainable Value concept, and Economic Value Added (EVA) methodology; and the company’s financial statements with notes of the selected company) using Internet and research databases and the author’s own experience. Methods of analysis, comparison, selection, abstraction, induction, deduction, determination, and statistics were used. In addition to the positives, this evaluation method also has negatives, including limitations (problems) in measuring a company’s value.
Highlights
The concepts of value and value creation have been discussed extensively in literature on strategic management, organizational, and partnership theory [1]
The value of a company provides a more accurate estimate of takeover cost than market capitalization because it includes a number of other important factors, such as preferred stock, and debt, and it backs out cash reserves
This study is based on information that was gathered through an extensive literature review (research publications and research studies about sustainability, corporate social responsibility, Sustainable Value concept, Economic Value Added (EVA) methodology; the company’s financial statements for 2015, 2016, and 2017 with notes of the selected company) using Internet and research databases (Web of Science, Scopus, EBSCO) and the author’s own experience (results from own research projects—VEGA 1/0653/18 Business sustainability as a prerequisite for prosperity; VEGA 1/0916/15 Business Excellence status assessment in relation to the corporate social responsibility concept)
Summary
The concepts of value and value creation have been discussed extensively in literature on strategic management, organizational, and partnership theory [1]. Contributions in the value field count Bowman and Ambrosini (2000), Makadok (2001), and Makadok and Coff (2002), who discuss value creation as value capture derived from value in use and value in exchange from a classic economic perspective on an organizational level [1]. The value of a company is a theoretical price at which it can be bought. It is significantly different from market capitalization and considers many other factors to arrive at the correct valuation of the business [3]
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