A negative EVA (Economic Value Added) for the year implies that the firm has not earned enough during the year to cover its capital of capital and the value of the firm has declined.

Question

Quizplus · Accepted Answer

A negative EVA means that the company has not earned enough to cover its cost of capital, which indicates that the company is not generating sufficient value for its shareholders. This can result in a decline in the firm's overall value.

A Negative EVA (Economic Value Added) for the Year Implies