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The EVA Curve Model: An Analytical and Econometric Approach
Francesca Mandanici, Roberta Pace, Vincenzo Vario
Pages - 124 - 149 | Revised - 31-08-2025 | Published - 31-10-2025
Published in Special Issue of 3rd Business Research & Management (BRM) Conference: Towards A More Sustainable World (SIBRM13)
MORE INFORMATION
KEYWORDS
EVA, EVA Curve Model, Zero EVA Point (ZEP), Performance Management, Managerial Policies, Professionalisation of Management Activities.
ABSTRACT
This research aims to analytically develop the traditional EVA formula by investigating how EVA
behaves in relation to a value driver represented by revenue. EVA and revenue do not invariably
exhibit a direct proportional relationship given the impact of management decisions on
operational, financial, and investment structures. The analytical development of the EVA formula
reveals the interplay between these structures and the underlying value creation variables,
resulting in a versatile model — the EVA Curve Model — which can be employed for planning
and monitoring business decisions, as well as evaluating management performance.
An empirical analysis is then carried out. The EVA Curve Model’s validity is demonstrated by applying an econometric approach to two Italian economic sectors: coffee roasting and construction. These sectors were chosen for two reasons: the former is characterised by stability and maturity, while the latter is strongly influenced by general economic trends, as well as specific government investment and fiscal policies. The findings of this empirical study confirm that, in some cases, there is an inverse relationship between total revenues and EVA. The proposed model helps managers take corrective action on the underlying variables to restore optimal conditions.
An empirical analysis is then carried out. The EVA Curve Model’s validity is demonstrated by applying an econometric approach to two Italian economic sectors: coffee roasting and construction. These sectors were chosen for two reasons: the former is characterised by stability and maturity, while the latter is strongly influenced by general economic trends, as well as specific government investment and fiscal policies. The findings of this empirical study confirm that, in some cases, there is an inverse relationship between total revenues and EVA. The proposed model helps managers take corrective action on the underlying variables to restore optimal conditions.
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Dr. Francesca Mandanici
Department of Industrial and Information Engineering and Economics, University of L’Aquila, L’Aquila, 67100 - Italy
Dr. Roberta Pace
Department of Industrial and Information Engineering and Economics, University of L’Aquila, L’Aquila, 67100 - Italy
roberta.pace@univaq.it
Dr. Vincenzo Vario
Department of Industrial and Information Engineering and Economics, University of L’Aquila, L’Aquila, 67100 - Italy
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