EVA
n. uncountablen. Stands for Economic Value Added. A way to measure how much profit a company really makes after paying all its costs, including the cost of its funding. It helps investors see if a business is truly creating value.
n. Abbreviation for Economic Value Added. A financial performance metric representing the incremental difference between a company's rate of return and its cost of capital. Used to determine the value created by an entity beyond the required return for its shareholders and debt holders.
The company reported a positive EVA for the third year in a row.
Management focused on improving the EVA by reducing unnecessary capital expenditures and increasing operational efficiency.
While traditional net income appeared healthy, the firm's negative EVA revealed that it was actually destroying shareholder value by failing to cover its weighted average cost of capital.