This paper examines introducing Economic Value Added as a performance measure for small companies. Advantages and disadvantages of using Economic Value Added as a primary measure of performance as opposed to sales, revenues, earnings, operating profit, profit after tax, and profit margin are investigated. The Economic Value Added calculation using data from a company’s income and balance sheet statements is illustrated. Necessary adjustments to these financial statements, that are typical for a small company, are demonstrated to prepare the data for the Economic Value Added determination. Finally, potential improvement opportunities resulting from Economic Value Added implementation as a performance measure in a small manufacturing companies are discussed.
KEYWORDS:Economic Value Added, Small Manufacturers, Small Business, Performance Measure