The concept of Economic Value-Added (EVA) is of recent origin. Considering its importance in the corporate world, it becomes vital to understand its role in shareholders’ value creation and performance measurement for companies. The present study is an attempt to analyze the relationship between EVA and the traditional measures, i.e., Earnings Per Share (EPS), Return on Invested Capital (ROIC) and Return on Net Worth (RONW). Using a sample of 50 companies listed on Nifty 50 index of National Stock Exchange, India from 2009-10 to 2013-14, the study ranks the select companies based on their mean EVA. The study concludes that there exists significant difference between the mean values of the considered variables of the select companies. It also reveals that ROIC has significant influence on EVA.

The concept of Economic Value-Added (EVA) was developed by Stern Stewert and Co. in the early 1990s, although similar concepts relating to shareholders’ value creation and performance measurement for companies were in use before the 1990s as reflected in the research articles of Rappaport, David Ricardo and others. Due consideration should be given for the terms value-added and economic profit before we proceed to understand EVA. When a firm creates wealth through the combined effort of management, workforce and capital, it is referred to as value-added. There is an input-output exchange between the external environment components and a firm; hence the concept of wealth arises. When a firm generates economic profit, value is said to be created. From a firm’s comparative or competitive advantage, the economic profit is derived. The amount by which operating income exceeds the cost of capital is known as ‘economic profit’. The value of the firm increases if there is economic profit. Similarly, the value of the firm declines if there is an economic loss.

Accounting Research and Audit Practices, Economic Value-Added (EVA), Earnings Per Share (EPS), Return on Invested Capital (ROIC), Market Value-Added (MVA), Economic Value-Added, Emerging Tool, Performance Measurement, Return on Net Worth (RONW) .