EVA Indicator Research Articles

Az intellektuális tőke mérési lehetőségei egy vállalati példán keresztül

Our research aims to examine the “invisible value” found at UPC Magyarország Kft. Since Vodafone Magyarország Nyrt. announced the acquisition of UPC Magyarország Kft. in 2020. Our research is aimed at using different methods to determine the invisible assets, intellectual capital, and added value, which cannot be determined directly from the financial statements of UPC Magyarország Kft. Since the financial statements prepared based on accounting principles follow the principle of prudence, many assets (mainly intangible assets) are not shown in the financial statements, so they only become visible after the moment of acquisition. Three different methods were used to measure intellectual capital, then the results were compared. The three methods use different points of view to measure intellectual capital and approach the concept of intellectual capital from other points of view. The CIV method shows us the lack of intellectual capital in relation to the industry or the surplus value; The EVA indicator explicitly shows us the intellectual capital size; and the VAIC method the efficiency of intellectual capital.

ECONOMIC VALUE ADDED AS AN INDICATOR OF EVALUATION FUNCTIONING EFFICIENCY OF A COMPANY

Article focuses on analyzіng of the definition company economic value added relevance. Corporate management is a rather complex and versatile process. It must be based on accurate and constructive data. Accounting calculations are not a clear indicator of the state of the company in some cases. Because they don`t provide sufficiently meaningful information on the real efficiency of economic activity. As a result, it is difficult for owners and shareholders to determine the real economic value of companies in today's economic environment. Therefore the use of the EVA concept is becoming so popular. However, the question of its validity is still relevant for discussion all over the world. So, we are faced with the aim of studying the theoretical and practical principles of using economic value added as an important financial management indicator to evaluate the efficiency and development of the company. It describes the basis of the emergence of this concept. It is proved that EVA indicator modeling is an effective tool of the general system of financial management at the company. The benefits that owners, shareholders, management and potential investors receive when using EVA indicator are identified. The main is a real understanding of the efficiency of the company. The study compared EVA to other alternative tools for similar purposes and identified it as both simple and effective. The formulas for calculating the indicator are given. All of them are reduced to determining whether the profitability of the company covers the costs incurred and whether there is a formation of value added. On the basis of formulas, a constructive method of EVA calculation is constructed. It is found that the result determined in the calculation process may be lower than zero or equal to it in the case of unproductive management. What means that values above zero and positive dynamics are the most desirable for the company. The steps of application of the concept for strategic planning are presented. It is determined which components of the EVA model should be influenced to optimize and increase the value of EVA indicator.

Application of Economic Value Added under the Conditions of Globalization: Study of Real Estate Industry

Research background: The success and stability of any company depends mainly on its financial health. This research is focused on the application of economic value added as a methods for analysis of financial health of company. The EVA indicator characterizes the company’s ability, which is reduced by the price of equity. In other words, the capital invested in the company has a benefit that exceeds the cost of that capital. The goal of each owner is to achieve the maximum possible appreciation of this invested capital and thus ensure the appreciation of the company’s assets. Purpose of the article: The main aim of the paper is to assess the financial health of companies in the real estate industry by economic added value under the conditions of globalization. Methods: For research was used the data of Slovak enterprises from real estate industry, obtained from annual financial reports covering the year 2019. Based on these data economic value added were calculated. Especially, EVA equity methods was used. Cost of equity were quantified by capital assets pricing model. Subsequently, the results obtained were examined by descriptive statistics. Findings & Value added: The results of paper bring comprehensive analysis of financial health of Slovak companies from real estate industry by economic value added. Paper identified the value of economic value added in all companies from this industry, quantified both, the largest and the smallest values of economic value added in data. Subsequently, study applied descriptive analysis of results.

A Review of the Application of the Concept of Economic and Smart Sustainable Value Added (SSVA) in Industries Performance Evaluations

In today’s global digital world, smart sustainable development, value and wealth creation are among the most important goals of society. Industry performance entails the incorporation of the objectives of smart sustainable development, namely social and territorial cohesion, economic efficiency, innovation, digital and environmental performance, into a company's operational practices. Companies that compete globally are increasingly required to commit to and report on the overall smart sustainability performances of operational initiatives. The current indicator frameworks that are available to measure overall business sustainability do not effectively address all aspects of sustainability at an operational level, especially in developing countries such as Romania, Belarus or Macedonia. For the sake of achieving these goals and objectives, the corporation, investor and government need some instruments in order to measure the potential value of each investment opportunity. It is clear that these instruments are not capable of predicting the exact future, they just provide some piece of information and advice that help the investor and government in the decisions he makes. Among these criteria, the most common types are Return on Investment (ROI), economic and sustainable value added (EVA and SVA). These criteria follow the performance assessment with regard to the changes in the sustainable value and alongside maximizing the long-term shareholder and society returns. In this paper, one of the most important criteria; i.e. EVA, is investigated from several viewpoints. First, it is demonstrated the attempt to calculate EVA at the industry level using aggregate indicators according to the common business methodology. For this, we generally assume that economic value is created by investment in excess return compared to its cost. We adopted EVA indicator to Belarusian general economic conditions and specifics of available aggregate sector data by adjusting return on investment and cost of capital.

Indicator Layers Based on Ethylene-Vinyl Acetate Copolymer (EVA) and Dicyanovinyl Azobenzene Dyes for Fast and Selective Evaluation of Vaporous Biogenic Amines.

The article presents naked-eye methods for fast, sensitive, and selective detection of isopentylamine and cadaverine vapours based on 4-N,N-dioctylamino-4′-dicyanovinylazobenzene (CR-528) and 4-N,N-dioctylamino-2′-nitro-4′-dicyanovinylazobenzene (CR-555) dyes immobilized in ethylene-vinyl acetate copolymer (EVA). The reaction of CR-528/EVA and CR-555/EVA indicator layers with isopentylamine vapours caused a vivid colour change from pink/purple to yellow/orange-yellow. Additionally, CR-555/EVA showed colour changes upon exposure to cadaverine. The colour changes were analysed by ultraviolet–visible (UV/VIS) molecular absorption spectroscopy for amine quantification, and the method was partially validated for the detection limit, sensitivity, and linear concentration range. The lowest detection limits were reached with CR-555/EVA indicator layers (0.41 ppm for isopentylamine and 1.80 ppm for cadaverine). The indicator layers based on EVA and dicyanovinyl azobenzene dyes complement the existing library of colorimetric probes for the detection of biogenic amines and show great potential for food quality control.

A Comparative Analysis of Modern Performance Methods in Economic Practice

The main objective of this paper was to analyse the performance and efficiency development of the Slovakia's spa sector over the years 2013 – 2017 by applying the selected modern methods of business performance evaluation – the Economic Value Added, the Return On Net Assets, the Creditworthy Model, the Simplex Linear Programming Method and examine whether the application of these modern models provides an identical view of the financial performance of the sector surveyed. The intention of the paper was also to reveal statistically significant interconnections between the key EVA indicator and other modern methods. In the case of confirmation of a strong correlation we focused on evaluation the degree of identity with the results of above-mentioned applied methods. Despite the fact that these models evaluate performance on the basis of different input data and indicators, year 2015 was identically identified as the best-performing one, vice-versa, the worst financial performance of enterprises was recorded in 2016 within the application of all methods.

Economic Value Added as a Measurement Tool of Financial Performance

Abstract The value-based concept of measuring business performance has its theoretical basis in economic profit. The idea of economic profit is based on the existence of opportunity costs that are very well known in the economic theory. The article deals with measurement of the economic profit by the Economic Value Added indicator. It points out, that when considering the economic profit and its measurement one must first distinguish the theoretical basis of the concept, forms of application and possibilities of application in practice. The gathered data and the transformation of this data from the form provided by the accounting into the desired patterns, respectively into the structures of Economic Value Added plays a key role in these processes. The aim of this paper is to present one of the possible methods of calculating the EVA indicator in conditions of Slovak companies and accounting legislation in Slovakia. Primary data as well as secondary data were used for the purpose of this paper, along with various methods such as analysis, synthesis, deduction, etc.

UKAZATEL EKONOMICKÁ PŘIDANÁ HODNOTA (EVA) A SCHOPNOST FIRMY VYTVÁŘET AKCIONÁŘSKÉ BOHATSTVÍ

This paper is devoted to the possibilities of Economic Value Added index usage in the conditions of Czech food-processing industry and is trying to provide independent empirical evidence on the indicator’s qualities. The EVA proponents attach to it a superiority compared to other common performance measures. The aim of this article is to investigate the relationship between Economic Value Added, traditional performance measures (ROA and ROE) and ability of creation of shareholder wealth for food-processing firms in the Czech Republic. The way of intended comparison is not dissimilar to the main world studies, which are quoted in this paper. A critical point of the EVA’s application in the conditions of Czech economy is a lack of good quality information from capital market, which at the same time, serve as an exogenous criterion for assessing the quality of the examined measures in the mentioned studies. In the absence of quality capital market information, a criterion for assessing the information content of performance measures suitable for conditions of Czech economy is developed in this paper. This also shows how to circumvent the handicap of the available data.The intent of this article is fulfilled by providing a simple regression test of the hypothesis, that the EVA measure is more associated with improved shareholder wealth than traditional performance measures ROA and ROE. The results of regression analysis show higher quality information content of EVA indicator in the relationship to the ability of shareholder wealth creation than traditional performance measures. This fact supports the tested hypothesis as well as the conclusions of corporate finance theory, that from the theoretical point of view EVA is seen as a superior performance metric.

PROBLEMATICKÉ ASPEKTY UKAZATELE EKONOMICKÉ PŘIDANÉ HODNOTY V PODMÍNKÁCH ČR

The EVA indicator has been constructed in the recent past as a reaction to requirements of the new economic environment. As the EVA indicator has been introduced by Stewart Stern & Co. in the early nineties, past two decades many economists have been discussing the pros and cons of EVA application as well as various adjustments needed to calculate some relevant result. A range of attitudes to the adjustments to accounting data towards economic data exist there. As the indicator of economic value added is considered to be a criterion of company’s real economic performance it is necessary to be very careful at applying encouraged adjustments. In this article, the authors compare and discuss these adjustments advised in order to reach some ideal number. Accounting differences of US GAAP, IFRS and Czech Accounting Standards are taken into consideration.

Association between values of the Index IN 99 and the EVA indicator

The modern indicators of the performance of business entity are based on an economic conception of profit. It means that alternative costs and risks are taken into account in construction of these indicators. Moreover, the modern indicators would also enable to clearly and digestedly identify the links on each level of management, and therefore to support the value-based management. The one of these modern indicators is Economic Value Added. This indicator has been introduced by Stewart Stern & Co. in the early nineties. As some Czech authors state (e.g. Synek, 2007), domestic alternative of the EVA indicator are the IN indexes which has been developing since the middle of the nineties as overall indexes of company’s financial health especially because the indexes coming from abroad had not a good differentiation ability with regard to specifics of the Czech economic environment. The objective of this article is to define the relations between the values of EVA indicator and the values of the index IN 99 while the analysis is focused on agricultural companies of mixed farming. The authors base their work on differences in constructions of these two indicators and on ­differences in interpretations of their results. Primarily, basic correlation of values of these indicators has been observed. The calculation of Pearson correlation coefficient has been applied on the set of fifty business entities, and the calculated result of 0.669 shows relatively stronger linear dependence. Consequent test has verified a statistical significance of this dependence. Then in this article, the authors are focused on causations of this dependence which is rather strong in spite of a different logic of these two indicators. Other consequences of overall view on company’s economic performance are discussed in the article as well.

Implementation of EVA indicator in value based remuneration system in small and medium-sized enterprises

A value based remuneration system can be ranked among the modern remuneration systems. The value based remuneration systems focus their attention on the interconnection of the personal objectives of employees with the objectives of owners. Such an aim can be accomplished by meticulously selected evaluation quantities. A presented article concentrates on the economic value added quantity. This topic was a subject of an undertaken research within the framework of the Internal Grant Agency of the Faculty of Business and Management, the partial objective of which was to acquire the information on the value based remuneration systems applied in the small and medium-sized enterprises situated in the South-Moravia region. Selected research results are presented in the submitted article. The investigation research outputs enriched and completed a literary background research and together with the secondary research results facilitated the formulation of pre-requisites appropriate for the value based remuneration system application in the remuneration schemes of the small and medium-sized enterprises. On the basis of the formulation of these pre-requisites the article describes the EVA indicator implementation progress steps in the value based remuneration system and, subsequently, an employee value based remuneration model with the indicator of the economic value added is introduced.

Zarządzanie Wartością Przedsiębiorstwa Na Przykładzie Przedsiębiorstw Z Branży Wydobywczej (Enterprise Value Management Companies - For Example the Extractive Industries)

This report shows how you can manage the enterprise value by applying an appropriate strategy finansownia current assets on the example of companies in the mining sector. Are considered three strategies: aggressive, conservative and moderate, and compare them with the actual state business. Are analyzed for 2010 and 2011 and the basis for evaluation of EVA indicator.

Economic Value Added for Performance Evaluation: A Financial Engineering

This article utilizes Financial Engineering method to build the performance evaluation system centering on the value creation ability of commercial banks. It makes the evaluating indicators dimensionless with the extreme value processing method to obtain comprehensive score and sequence of the performance for the sample commercial banks, and finally the conclusion is made that it is important and practical to replace traditional indicators with EVA indicator in the performance evaluation of commercial banks.