Cash Value Added (CVA Anelda)

Posted in Finance, Accounting and Economics Terms, Total Reads: 804

Definition: Cash Value Added (CVA Anelda)

The CVA model measures the ability of a company to generate cash through its operations. A higher value of CVA is always better for the company and sends a positive signal to the investors and creditors.

It is calculates as: CVA = Operating Cash Flow – Operating cash flow demands

Where Operating cash flow is equal to

OCF = Operating surplus + (-) Working capital management – Non strategic investments

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