Economic value added measures

Economic value added The period dollar profit above the cost of capital. It is a means to measure an organization s value and a way to determine how management s decisions contribute to the value of a company. 

Market value added A certain future economic value added for a company. It is the present value of the future economic value (EVA) generated by a company. It is a measure of how much value a firm has created. 

Cross-industry studies provide similar results. For example, a recent analysis presented in the CFO magazine indicates that changes in Economic Value Added (the measure that has been associated with shareholder value) explain only 35 percent of changes in market value. Another study at New York University s Stern School of Business indicates that Intangibles drive up to 75 percent of market value. 

E-Business - Internal Software E-Business - Sell-Side Software Economic Profit Measures Economic Value Added EDI... 

When speaking of value, there is, basically, a financial and a non-financial interpretation of that term (Moller Tdrrdnen, 2003 323 Walter et aL, 2001 45). The financial meaning is closely linked to shareholder value, which characterizes a concept solely orienting a company s activities towards an enhancement of the value of its shareholders. As a result, the market value of the employed equity capital will be maximized (Buhner, 1992 418). The interests of other stakeholders are taken into account insofar as they are a means of achieving that objective. For the measurement of value enhancement, a set of diverse business metrics is developed, for example the economic value added (EVA), the discounted cash flow (DCF) or the cash flow return on investment (CFROI). However, the development of the shareholder value approach is not yet complete (Beck, 2003 3). Thus, many forms of application and transfer can be found, such as a combination of SCM and the shareholder value approach. Singhal Hendricks (2002, 2008) hint at the necessity of managing a supply chain in terms of the principles of shareholder value. The same thoughts can be found in the publications of Laupper (2004), Losbichler Rothbock (2006) and Neher (2003), who all deal with the transfer of the ideas of shareholder value into the context of supply chains. Due to the one-sided concentration on financial metrics and the value enhancement for the benefit of the company s shareholders, the stakeholder value approach is opposed to shareholder value (Achleitner, 1985 73 Bischoff 1994 ... 

In order for clusters to be successful, the ability to manage them is required. Therefore it is necessary to identify the optimal performance measures and suggest its effective usage for managing the cluster. The contribution dealt with the identification of performance measurement problems of clusters as a whole, with the focus on the financial performance. As an adequate tool for measuring the performance of individual eluster members and clusters as a whole, as well. Economic Value Added (EVA) is recommended. 

Pavelkova, D., Knapkova, A., Drobny, J. G. Measuring A Company s Performance Economic Value Added in Comparison with Traditional... 

Using a 260/wafer sales price for epitaxial silicon wafers and the United States MACRS tax-basis depreciation schedule, the investor s rate of return (IRR) is 18.3%. In addition, the return on investment (ROI) is 25.3%. These measures increase significantly with small changes in sales price for example, at 273/wafer, the IRR is 29.9%. Note that the economic analysis is somewhat shielded from variations in the price of epitaxial wafers because it is strongly linked to the price of the incoming polished wafers. In other words, the key metric of interest is the value added to the wafer by the epitaxial film deposition. 

The ultimate goal of all economic activity is to supply final products (including goods and services) for consumption. To produce a final product, input from several industries is required. The net contribution to production by a particular industry is termed value added. It can be measured as the difference between the industry s total sales and the cost of goods and services it purchases from other industries. The summation of all value-added contributions made by all industries as well as by individuals and the government equals the gross national product (GNP). The GNP is then the value measured in dollars of all such production for any particular year. 

Although the GNP was a measure of output in the past, in the last two decades, the gross domestic product (GDP) has come to be viewed as a more realistic measure of the economic output of the United States or any nation. By definition, the GDP is the total output of goods and services produced by labor and property located in the United States or any nation and valued at market prices. For the economy as a whole, the total of all final uses of commodities equals the total value added by all industries, or GDP. 

The most aggregate economic energy efficieiKy indicator is generally called the energy intensity. A commonly used economic indicator in industry is based on value added. Most national statistics produce figures for value added. Because activities in various sectors are expressed in one measure, it is possible to add them, which is an important advantage of this type of indicator. 

The most important shortcoming of economic indicators is the lack of ability to reflect the structural differences among countries, or within a country in time. To some extent this can be corrected for by using decomposition analysis (see Section IV.C). However, usually only intersectoral differences in stiuctine are accounted for in this type of analysis. In addition, economic efficiency indicators can be strongly inflnenced by changes in product prices, feedstock prices, etc. Furthermore, parts of the economy do not generate valne added (as measured in the official statistics), such as trade in informal economies (black markets) or barter economies, intermediate products that are used within the same compare, etc. For historical analyses, we also have the a problem that planned economies did not use concepts like GDP and value added. 

Value added avoids the duplication in the value of shipments figure which results from the use of products of some establishments as materials by others. Consequently, it is considered to be the best value measure available for comparing the relative economic importance of manufacturing among industries and geographic areas. —U.S. Department of Commerce, 1958 Census of Manufactures, VoL //, p. 13. 

Money is a measure of the value of products and services. The value of a chemical material is the price it can be exchanged for in dollars. Investments may be made in units other than dollars, such as stocks, bonds, grain, oil, or gold. We will often refer to value, or value added, in describing investments. The term va/ue is a general one and, in our case, maybe assigned a dollar figure for economic calculations. 

The degree to which industrialized societies have dematerialized can be seen from Figure 1.3, in which the amount of material consumed (expressed as carbon from fossil feedstocks used) per unit of added value (using gross domestic product as a measure of economic activity) has declined steadily over the past 30 years of industrial development. 

Level 2 Input/Output Analysis. This stage sets the framework of the overall material balance delimited by raw materials at input, and products, byproducts and waste at output The key design decision regards the performance of the reaction system. On this basis, the initial feasibility is evaluated by means of an economic potential or by any other measure for the added value. The analysis should include... 

In fact, the table did not reflect the economic evaluation of the pressure relief range after the optimization of technology. Because there is not yet accounting the security investment of protective layer, so temporarily ignore it. However, it can be seen from the table, only consider addition of the recovery rate, the reduction of the roadway excavation and maintenance costs, the optimized technical measures added value of 95.037 million yuan than the original program. Thus, the economy of optimized technical solutions is objective. 

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