Economic value added (EVA) as an indicator for financial decisions: An Application to the Province of Santa Elena, Ecuador

• Autores: Víctor Solorzano, Lupe García Espinoza, María Ramos Escamilla, Óscar René Vargas Delgado
• Localización: Ecorfan Journal, ISSN-e 2007-1582, Vol. 4, Nº. 10, 2013, págs. 1077-1086
• Idioma: inglés
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• Resumen

  • This paper analyses the need to use alternative methods to the traditional accepted techniques applied in investment analysis for associative groups. This paper exposes that the technique economic value added (EVA) can contribute to measure other aspects involved in financial decisions for associative groups omitted in traditional indicators of project evaluation, net present value (NPV) and internal rate of return (IRR) such as i) evaluation of the productive activity of the associated strategies popular and solidarity economy ii) quantifying the profitability generated by the implementation of the project, iii) identifying the main impacts generated by implementing the creation of the company and iv) the identification of the economic value added. This tool permits the employment of probabilistic scenarios, in order to simulate changes in the input parameters for determining when the EVA tends to zero, making a comparative analysis with the NPV. It is used to calculate the weighted average cost of capital (WACC) market financial returns because you cannot get or inefficient conduct the study by estimating the beta for the CAPM method because Ecuador has not data from the stock exchange. We execute an application of this method a processing plant for the production of salt in Jose Luis Tamayo, situated in the Province of Santa Elena, Ecuador.