Publication:
An analysis of economic value added (EVA) TM as a measure of financial performance and risk assessment

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Authors
Bailey, William E.
Subjects
Advisors
Moses, O. Douglas
Sieden, Neil
Date of Issue
1994-12
Date
Publisher
Monterey, California. Naval Postgraduate School
Language
en_US
Abstract
In the fiscal years 1992 through 1994 over 100 million dollars in contracts were terminated for default by the Department of the Navy (DON) alone. There is a need for the Department of Defense (DOD) and the DON to develop or use an accurate and dependable means for assessing which contractors will be able to remain financially capable of fulfilling the terms of their contracts. Currently the Navy uses standard accounting measures and other financial accounting ratios to determine the financial capability of prospective contractors. While the standard accounting ratios and measures have performed adequately, it is possible that improved measures,such as Economic Value Added (EVA (TM)), may exist. This thesis provides some evidence, based on statistical tests using EVA TM data and financial ratio data for the years 1983 through 1992, on the potential value of EVA(TM) as an information item. Specifically, this study determined that EVA(TM) was unique and distinct from traditional accounting ratios and that past EVA TM is an effective predictor of future EVA(TM)
Type
Thesis
Description
Series/Report No
Department
Management
Organization
Naval Postgraduate School (U.S.)
Identifiers
NPS Report Number
Sponsors
Funder
Format
85 p.;28 cm.
Citation
Distribution Statement
Approved for public release; distribution is unlimited.
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