ASSESSING IMPORTANCE OF FOUR RESIDUAL INCOME VARIANTS FOR ACHIEVING THE GOAL TO MAXIMIZE SHAREHOLDER VALUE

Abstract: In the modern financial theory, the notion of residual income indicates the group of measures, understood as the difference between return on invested capital and capital charge. The aim of this paper is to analyze characteristics of several variants of residual income and investigate their importance for acheaving the goal of maximizing shareholder value. Subject to analysis are economic profit (EP), economic value added (EVA), shareholder value added (SVA) and cash value added (CVA).

Key words: economic profit, economic value added, shareholder value added, cash value added

JEL Classification:
41, G30