The added value is a concept of operational excess profit and serves as a measure of the value creation in one year. The added value is based on the annual turnover and proceeds from the sale of operational services. Three items are deducted from this:
1. The expenditures or costs for the intermediate services obtained from third parties (raw materials, materials, parts, services)
2. The labor costs
3. Die Ausgaben oder Kosten für das betrieblich eingesetzte Kapital. Diese Position ist durch das Produkt aus dem betriebsnotwendigen Vermögen und dem Cost of capital gegeben
The concept of measuring value creation precisely through added value and not through another approach of excess profit is mainly cultivated at the London Business School.
Since the cost of capital for added value is determined by the level of the interest rate, the premium expected by equity investors for bearing risks is not included in the calculation. One cannot speak of outperformance when the added value is positive; it must exceed the risk premium in line with the market.
A notice: Added value and value added are different concepts. Value-added is a contribution margin that is taken into account in connection with value-added tax. The value added is also based on the annual turnover and proceeds from the sale of operational services, from which, however, only the expenses or costs for the intermediate services (raw materials, materials, parts, services) obtained from third parties are deducted. The value added should cover the operational production factors labor and capital.
In contrast, Added-Value and EVA (Economic-Value-Added) are related. The Economic Value Added, especially promoted by the management consultancy Stern Stewart & Co., should actually be referred to as Economic Added Value because it is (as with the added value) an excess profit. The differences between added value and EVA are small.
· However, it should be emphasized that the EVA does not offset the use of equity (as is the case with added value) with the interest rate, but with the cost of equity.
· Der Begriff „Economic“ bei EVA deutet zudem darauf hin, daß die Zahlen aus dem Rechnungswesen zunächst durch sogenannte Konversionen umgerechnet werden, so daß ihre ökonomische Aussagekraft zunimmt. Anders als der Added-Value geht EVA nicht vom Accounting-Modell sondern vom Economic model aus.
In addition to added value and EVA, two other concepts of operational excess profit have attracted attention, namely economic profit and CVA (cash value added).