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    Other Assessment Methods Here Are Two Additional Ways You Can Assess An Organization's Financial Health: Economic Value Added

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    SyedSalmanRahman
    This document discusses two additional methods for assessing an organization's financial health: economic value added (EVA) and productivity measures. EVA measures the profit left over after meeting the costs of capital such as wages, interest, and returns to shareholders, with a positive EVA indicating an economic profit. Productivity measures include sales and net income per employee, linking revenue and profit to workforce data to assess employee effectiveness in generating sales and income.

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    Other Assessment Methods Here Are Two Additional Ways You Can Assess An Organization's Financial Health: Economic Value Added

    Uploaded by

    SyedSalmanRahman
    14 views1 page
    This document discusses two additional methods for assessing an organization's financial health: economic value added (EVA) and productivity measures. EVA measures the profit left over after meeting the costs of capital such as wages, interest, and returns to shareholders, with a positive EVA indicating an economic profit. Productivity measures include sales and net income per employee, linking revenue and profit to workforce data to assess employee effectiveness in generating sales and income.

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    This document discusses two additional methods for assessing an organization's financial health: economic value added (EVA) and productivity measures. EVA measures the profit left over after meeting the costs of capital such as wages, interest, and returns to shareholders, with a positive EVA indicating an economic profit. Productivity measures include sales and net income per employee, linking revenue and profit to workforce data to assess employee effectiveness in generating sales and income.

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    14 views1 page

    Other Assessment Methods Here Are Two Additional Ways You Can Assess An Organization's Financial Health: Economic Value Added

    Uploaded by

    SyedSalmanRahman
    This document discusses two additional methods for assessing an organization's financial health: economic value added (EVA) and productivity measures. EVA measures the profit left over after meeting the costs of capital such as wages, interest, and returns to shareholders, with a positive EVA indicating an economic profit. Productivity measures include sales and net income per employee, linking revenue and profit to workforce data to assess employee effectiveness in generating sales and income.

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    Other assessment methods

    Here are two additional ways you can assess an organization’s financial health:
    Economic value added
    Productivity measures.
    Economic value added:
    Economic value added (EVA) was introduced as a way to induce employees to think like shareholders
    and owners. It’s the profit left over after the company has met the cost of capital—that is, after it pays
    wages to employees, interest to lenders, and a return to shareholders. A positive EVA amount shows that
    the company is in fact producing an economic profit.
    Productivity measures:
    Productivity measures include sales per employee and net income per employee. These measures link
    revenue and profit generation information to workforce data. In so doing, they help you assess
    employees' effectiveness in producing sales and income. Some analysts classify these measures as
    operating ratios.

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