The impact of the application of the economic value-added method in the food company

Radoslav Bajus

doi:10.5219/1910

Authors

Radoslav Bajus Technical University of Košice, Faculty of Economics, Department of Finance, Nemcovej 32, 040 01, Košice, Slovakia, Tel.: +421 055 602 32 82

DOI:

https://doi.org/10.5219/1910

Keywords:

company performance, financial analysis, economic value added, weighted average cost of capital, EVA

Abstract

One of the most popular methods to measure the performance and success of the company has become the economic value added. EVA supports strategic planning, and management can measure and evaluate performance at the division level. Through it, you can find results that are important not only for the company's management and the owners but also for the company's shareholders. For businesses in the market, it is essential to measure and evaluate the performance of the business, as they are exposed to the risk of competition and, of course, pressure from the environment. However, many companies are underestimating this measurement due to time-consuming and evaluating business performance based on financial statements. Therefore, they can only assess traditional indicators, often insufficient to determine the company's performance. The paper aims to inform readers about all necessary information related to the EVA method and draw the calculation on a specific example. We have determined the application of the method to a particular company as our primary goal. Therefore, we can get information on the performance of the selected company. The applied values and data are further applied and interpreted, which results in how the company manages its assets and how it can continue to improve its performance.

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