What is Economic Value Added (EVA) in HRM?

Learn Economic Value Added (EVA) definition in hrm with explanation to study “What is Economic Value Added (EVA)”. Study economic value added (eva) explanation with HRM terms to review HRM course for online MBA programs.

Economic Value Added (EVA) Definition

  • Net operating profit of a firm after the cost of capital is deducted.

    Human Resource Management by Robert L. Mathis, John H. Jackson



Economic Value Added (EVA) Explanation

Economic value added (EVA) is a proportion of an organization's money related execution dependent on the remaining riches determined by deducting its expense of capital from its working benefit, balanced for assessments on a money premise. EVA can likewise be alluded to as monetary benefit, as it endeavors to catch the genuine financial benefit of an organization. This measure was concocted by the board counseling firm Stern Value Management, initially joined as Stern Stewart and Co. EVA is the gradual distinction in the pace of return over an organization's expense of capital. Basically, it is utilized to gauge the worth an organization creates from assets put into it. On the off chance that an organization's EVA is negative, it implies the organization isn't creating an incentive from the assets put into the business. Alternately, a positive EVA demonstrates an organization is delivering an incentive from the assets put resources into it.

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