economic value added (EVA)
Definition
After-tax profit that exceeds the required minimum return on capital. Computed by deducting the cost of capital (both debt and equity) from the after-tax profit, it is said to be the best measure of the true profitability of an enterprise, and is tied to cash flow and not to earnings per share (EPS). EVA is a registered trademark of the US firm, Stern Stewart & Company.
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