Naslov
Value Added as a Measure of Economic Profit

Autori
Orsag, Silvije ; Džidić, Ante

Izvornik
Acta Economica (1512-858X) 39 (2018); 9-37

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
accounting profit, normal profit, economic profit, the cost of capital, value added

Sažetak
Economic profit is the concept immanent for the value added. It is an at - tempt to analyze properly the business success in terms of contribution of profit to the increase in the company value and the stockholders’ wealth. Fundamentally, value added is a measure of the business success where all standard costs and the costs of invested capital are excluded from the real - ized revenues. Profit as a traditional measure of business success ignores the cost of equity, although equity is the most expensive form of capital. To illustrate better this concept, we made an analysis of the most profitable corporations in Bosnia and Herzegovina listed on Banja Luka and Sarajevo stock exchanges. The analysis showed that the majority of these corpora - tions operate poorly because they do not meet the implicit cost of capital, essentially losing the value of capital entrusted to them by their stockhold - ers. Also, this analysis questioned the importance of the industries which are usually considered to be the most important in BiH economy.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA