inancial Statements, Cash Flow, and Taxes: EVA$/$MVA

The financial statements reflect historical data, but managers' performance must be evaluated on the basis of $[-$select$-$t $AA$ values, To provide this information, financial analyst

Market Value Added represents the difference between the money stockholders have invested in the firm versus the cash they could receive if the firm were sold. The equation

Shareholder wealth is maximized when this difference is

The a firm's MVA, the better the job management is doing for its shareholders.

Economic Value Added is sometimes called $"$

$-$Select$-$

$,$ and it is closely related to MVA. The equation for EVA is:

EVA $=$ NOPAT Total net operating capital