Procedia Economics and Finance · 2015 · 117 citations · 0 references
BusinessAccountingEconomicsFinancial AccountingFinancial EconomicsManagerial AccountingEconomic PerformanceFinancial Performance AnalysisIncome MeasurementOpportunity CostProfitability AnalysisValuation AnalysisAccounting Opportunity CostBusiness Performance IndicatorsEconomic Performance EvaluationProfitability MeasurementSecondary Data UseSecondary Data Use GovernanceValue Added CalculationValue Added Concept
Economic profit is grounded in economic theory, relying on opportunity costs, and serves as a value‑based measure of business performance. The article presents a method for calculating Economic Value Added (EVA) for Slovak companies under local accounting legislation. The study transforms accounting data into EVA structures using primary and secondary data, applying analysis, synthesis, and deduction techniques.
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.