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Metric Conflict in Financial Analysis: A Comparison and Application of EBITDA and EVA

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  • Hasan Yalçın

    (Crowe HSY, İstanbul, Türkiye)

Abstract

The aim of this study is to examine the differences and similarities between economic value added (EVA) and earnings before interest, depreciation, and taxes (EBITDA), two metrics commonly used in financial performance measurement. EVA and EBITDA are important tools used in evaluating company performance and profitability and differ in terms of the financial components they use. While EBITDA is a metric suitable for calculation based on financial statements, the requirement of additional company-specific information for calculating the EVA metric causes it to be left behind in terms of market application. However, the study is important in terms of emphasizing the difference in importance the two metrics have for businesses. The research includes the application and calculation of the metrics covered in the study on the case of Turkish Airlines Inc. (THY). When examining the research findings, the fact that both the EBITDA and EVA metric values for THY are positive shows it to have the appearance of being a value-creating company.

Suggested Citation

  • Hasan Yalçın, 2024. "Metric Conflict in Financial Analysis: A Comparison and Application of EBITDA and EVA," Muhasebe Enstitusu Dergisi - Journal of Accounting Institute, Istanbul University Business School, vol. 0(70), pages 39-57, January.
    • Handle: RePEc:ist:imeder:v:0:y:2024:i:70:p:39-57
    DOI: 10.26650/MED.1329674
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    More about this item

    Keywords

    Financial Statements Analysis; EBITDA; EVA JEL Classification : M40 ; M41;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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