Using incremental economic value adjustments in evaluating the results of the business activities

Abstract

The traditional measure commonly used in evaluating the performance of the business is the profit rate: rate of return on equity (ROE), profitability on assets (ROA) , rate of return on capital (ROC). This is the measure of accounting and has some limitations such as not taking into account the risks of the enterprise, use past data to calculate the fig unpredictable future benefits, the coefficients are determined based on book value without taking into account the market value.