Gross Value Added - GVA

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Capital Expenditure - CAPEX

    Funds used by a company to acquire or upgrade physical assets ...
  2. Cost Of Goods Sold - COGS

    The direct costs attributable to the production of the goods ...
  3. Economic Value Added - EVA

    A measure of a company's financial performance based on the residual ...
  4. Margin

    1. Borrowed money that is used to purchase securities. This practice ...
  5. Market Value Added - MVA

    A calculation that shows the difference between the market value ...
  6. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
Related Articles
  1. Analyze Investments Quickly With Ratios
    Investing Basics

    Analyze Investments Quickly With Ratios

  2. What is the difference between economic ...
    Investing

    What is the difference between economic ...

  3. Measuring Company Efficiency
    Fundamental Analysis

    Measuring Company Efficiency

  4. All About EVA
    Options & Futures

    All About EVA

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center