¿Es el EVA, realmente, un indicador del valor económico agregado?

Authors

  • Hernán Herrera Echeverry Universidad EAFIT

Keywords:

CVA (Cash Value Added), TRFC (Rate of Return on Cash Flow), UE (Economic Profit), VPN (Current Net Value), residual income, discount cash flow valuation of projects.

Abstract

In this article we analyze the relevance of EVA (Economic Value Added) as a tool for measuring value added, as well as its usefulness as an indicator in choosing investment projects.  First, we show five ways of calculating EVA, providing examples of each case. Second, we show MVA (Market Value Added) and NPV (Net Present Value) to be equivalent as criteria used to evaluate investment projects.  This is done with both the limited term and the perpetual cases, as well as for projects with partial and total recovery of the investment.We present a thorough analysis, showing the possibilities and limitations of EVA as a value added measure.  We also introduce three measurements of residual income, CVA (Cash Value Added), Cash Flow Return on Investment (CFROI) and Economic Profit (EP), which complement EVA in the value measurement process. Finally, we introduce an example that explicitly shows the equivalence between CVA’s present value, MVA and NPV.

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Author Biography

  • Hernán Herrera Echeverry, Universidad EAFIT
    Magíster en Dirección Universitaria

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Published

2006-12-04

Issue

No. 9 (2006)

Section

Research Articles

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How to Cite

Herrera Echeverry, H. (2006). ¿Es el EVA, realmente, un indicador del valor económico agregado? AD-Minister, 9, 38-61. https://publicaciones.eafit.edu.co/index.php/administer/article/view/634