EVA for Small Manufacturing Companies

Narcyz Roztocki
Kim LaScola Needy

This paper was presented at the
Society for Advancement of Management (SAM) 1999 International Management Conference in Las Vegas.
March 28-30, 1999 Harrah’s Hotel, Las Vegas, Nevada

Roztocki, N. and Needy, K. L. "EVA for Small Manufacturing Companies", Society for Advancement of Management (SAM) 1999 International Management Conference, Las Vegas, Nevada, March 28-30, 1999.


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.


Economic Value Added, Small Manufacturers, Small Business, Performance Measure


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