How does this calculation compare with a ratio analysis


A company has earned an operating return on assets of 12%, above the industry average of 10%. It has been estimated that the company’s investors have an opportunity cost on their investment of 14%, a return equal to the company’s overall cost of capital. The company’s total assets were $100 million. Compute the EVA (economic value added) for the firm. How does this calculation compare with a ratio analysis comparing the firm’s performance relative to its competitors?

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Financial Management: How does this calculation compare with a ratio analysis
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