European Financial and Accounting Journal 2011, 6(3):103-110 | DOI: 10.18267/j.efaj.28

Economic Value Added and Its Benefit for Owners and Managers of the Czech Company

Bohuslava Knapová
Ing. Bohuslava Knapová, CSc. - Senior Lecturer; Department of Managerial Accounting, Faculty of Finance and Accounting, University of Economics, Prague, W. Churchill Sq. 4, 130 67 Prague 3, Czech Republic; <knapova@vse.cz>.

The paper is oriented to the area of management and decision making of company owners and managers. The absolute synthetic performance criterion Economic Value Added represents the criterion of the residual income and managerially measured profit. Concrete questions must be solved with the ascertainment of this financial criterion as for example how correctly to measure capital costs, how to determine the right amount of the investment capital and return on investment capital, eventually return on assets, or how to work with the time horizon in the measurement of Economic Value Added, because this criterion should be presented also as the important tool of the transformation of strategic targets on tactical time periods and to lower structural levels of investment and profitability responsibility centers. Economic Value Added should serve as one of criteria of investment decision and as criterion of the appraisal of managerial decision making, because just managers are responsible for the economical process and results of the main operating activities.

Keywords: Economic Value Added, Management and decision making, Owners and managers, Performance criteria, Weighted Average Capital Costs
JEL classification: M41

Published: October 1, 2011  Show citation

ACS AIP APA ASA Harvard Chicago IEEE ISO690 MLA NLM Turabian Vancouver
Knapová, B. (2011). Economic Value Added and Its Benefit for Owners and Managers of the Czech Company. European Financial and Accounting Journal, 6(3), 103-110. doi: 10.18267/j.efaj.28
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Crawford, I. (2008): Management Accounting: A Strategic Approach. London, Financial Times Press, 2008.
    2. Kislingerová, E. (2001): Oceňování podniku. (In English: Enterprise Valuation.) Praha, C. H. Beck, 2001.
    3. Knapová, B. (2009): A Benefit of New Costing Methods for the Strategic Management. European Financial and Accounting Journal, 2009, vol. 4, no. 2, pp. 79-89. Go to original source...
    4. Knapová, B. - Popesko, B. (2011): Economics Value Added and Its Benefit for Owners and Managers of Czech Companies. In: SeventyFirst International Atlantic Economic Conference. Athens, IAES, 2011, s. 20.
    5. Knapová, B. - Krabec, T. - Roubíčková, J. (2009): EBIT Level of Profit and Its Use in Financial Analysis of a Private Czech Company. Oceňování, 2009, roč. 2, č. 4, s. 47-74.
    6. Král, B. et al. (2010): Manažerské účetnictví. (In English: Managerial Accounting.) Praha, Management Press, 2010.
    7. Mallya, T. (2007): Základy strategického řízení a rozhodování. (In English: Bases of Strategic Management and Decision Making.) Praha, Grada, 2007.
    8. Maříková, P. - Mařík, M. (2001): Moderní metody hodnocení výkonnosti a oceňování podniku (In English: Modern Methods of Judgement of Performance and Enterprise Valuation.) Praha, Ekopress, 2001.
    9. Proctor, R. (2009): Management Accounting for Business Decisions. London, Financial Times Press, 2009.
    10. Šoljaková, L. (2009): Strategicky orientované manažerské účetnictví. (In English: Strategic Oriented Management Accounting.) Praha, Management Press, 2009. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International License (CC BY 4.0), which permits use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content