Will 2009 be the year when EVA comes of age?
The Economic Value Added (EVA) ratio appeared originally as the financial ratio that would solve everything, obviously this proved not to be the case. The EVA calculation, like most other financial ratios, only comes of age when it is used with a selection of other data analysis.
It is however worth recognising that investors appear to be in need of a “back to basics” approach, therefore EVA may be about to come of age.
The coming of the new year in 2009 saw a brief glimpse of optimism, which was sadly wiped out by the markets quickly. It will be interesting to see if when the 2010 New Year comes in if the EVA would have come of age.
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