Operating profit and prices impact financial performance, revolutionizing company management strategies.
The study looked at how economic value added (EVA) can measure a company's financial performance. They found that changes in EVA are influenced by the general level of prices and operating profit. In fact, 22% of the changes in EVA are due to these factors. Managing operating expenses and considering inflation when calculating EVA are important for maximizing EVA value. Other factors like sales volume, cost of capital, and company growth can also affect EVA.