Budiningsih, Benedicta (2014) Penilaian Kinerja Perusahaan Dengan Pendekatan Economic Value Added. Caritas Pro Serviam, XXVIII (01). pp. 74-87. ISSN 1410-4547

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Abstract

This writing aims at finding the firm’s performance in managing finance using Economic Value Added (EVA) approach. EVA is a measurement of the firm’s operational performance. It emphasises on creating a firm’s value. EVA measures the added value resulted by the firm by reducing the profit with the cost of capital caused by investation. Economic Value Added (EVA) is calculated from NOPAT (Net Operating Profit After Tax), capital/invested capital, Weighted Average Cost of Capital (WACC), capital cost, and EVA of the firm. The result is then used in the performance criteria using EVA method based on a certain criteria. From the measurement of the performance, the degree of the firm’s performance can be known. The criteria shows that if EVA ˃ 0, it means there is a process of economic value added in the firm. In other word, EVA shows positive value. If EVA = 0, it means there is a balance position economically because all profit is used to pay the obligation to the investors, either creditors or stockholders. If EVA ˂ 0, it means there is no process of economic value added to the firm. It happens because the avaiable profit cannot meet the expectation of the investors (especially the stockholders). In this case, EVA shows negative value. Based on the description above, it is shown that EVA measures the firm’s performance on the economic aspect fairly by considering the weighted average cost and the market value, not the book value. It also considers the expectation of the investors.

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