THE FINANCIAL PERFORMANCE OF FARMING CO-OPERATIVES: ECONOMIC VALUE ADDED VS TRADITIONAL MEASURES

The profitability measures have limitations for examining wealth creation. Economic Value Added (EVA) is being used by businesses to measure wealth creation. EVA has some advantages over other financial ratios because it fully accounts for the resources used by co-operatives and it includes both realized and unrealized capital gains in the calculation. This article examines the EVA metric for four years of co-operative financial data to determine if it provides additional information about wealth creation and profitability than do the other ratios.