Economic Value Added as a Measurement Tool of Capital Structure Effectiveness at the Power-Producing Enterprises
| Authors | |
|---|---|
| Year of publication | 2016 |
| Type | Article in Proceedings |
| Conference | Proceedings from 8th International Scientific Conference Managing and Modelling of Financial Risks 2016 |
| MU Faculty or unit | |
| Citation | |
| Field | Management and administrative |
| Keywords | Economic value added; capital structure; effectiveness; power-producing enterprise |
| Description | This paper contributes to the investigation of Economic Value Added (EVA) measurement process and approaches of its calculation as an assessing tool of Capital Structure effectiveness. The main objects included into author’s investigation are power-producing enterprises of Ukraine and Czech Republic listed on a stock exchange market. The main aim of the research is to demonstrate the modified author’s approach to Economic Value Added calculation, which gives an opportunity to adjust interpretation of results depending on used types of capital and desired units of measure. Thus, provided approach directed on improving capital structure effectiveness at the power-producing enterprises as a part of a capital-intensive branch. Introduced approach derives from standard method or evaluation and split capital into its two constituent parts that give the advantage to measure the effectiveness of Debt and Equity separately. Moreover, author’s approach reduce the complexity of investigation due to modification of standard decomposed formula of Economic Value Added. Therefore, enterprises can easily calculate the effectiveness of committed capital and its structure using EVA measurement tool in their activities. |