Gross Value Added - GVA

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DEFINITION of 'Gross Value Added - GVA'

A productivity metric that measures the difference between output and intermediate consumption. Gross value added provides a dollar value for the amount of goods and services that have been produced, less the cost of all inputs and raw materials that are directly attributable to that production.

BREAKING DOWN 'Gross Value Added - GVA'

At the company level, this metric could be calculated to represent the gross value added by a particular product or service the company currently produces or provides. In other words, the GVA number reveals how much money the product or service contributed towards meeting the company's fixed costs and providing opportunity for a bottom-line profit.

Once the consumption of fixed capital and the effects of depreciation are subtracted, the company knows how much net value the operation adds to its bottom line.

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RELATED FAQS
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    Economic value added (EVA) is a performance measure developed by Stern Stewart & Co that attempts to measure the true ... Read Full Answer >>
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    While both debit orders and standard orders represent recurring transactions that must be considered in bank reconciliations, ... Read Full Answer >>
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