ECONOMIC VALUE ADDED Definition

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ECONOMIC VALUE ADDED (EVA) measures the difference between the return on a company's capital and the cost of that capital. A positive EVA indicates that value has been created for shareholders; a negative EVA signifies value destruction.

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EXTRAORDINARY ITEMS are material items that are unusual in nature and occur infrequently. Both characteristics must exist for an item to be classified as an extraordinary item on the income statement.

CREDITORS TURNOVER = Average creditors / (Credit Sales / 365).

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