Residual Income

Knowledge Center

   

Description of Residual Income. Explanation.

Contents

Premium

 

Definition Residual Income. Description.


Residual Income is the generic financial term for after-tax profit less an imputed interest charge for the opportunity cost of capital employed by the business. It is important to take the cost of capital into account, because otherwise indications of corporate performance are unreliable. These indications are used for many purposes including setting organizational goals, measuring the performance of a corporation, determining management bonuses, etc.


Economic Value Added, Cash Value Added and CFROI are all examples of residual income measures.

EBIT, EBITDA and Earnings per Share are examples of measures that do not include the opportunity cost of capital employed and are therefore unreliable when it comes to judging organizational performance.


Residual Income Special Interest Group


Special Interest Group (7 members)


Residual Income Forum  

Recent topics

  Residual Income Cases and Examples
Hi, do you know of a remarkable case or an interesting example of the use of residual income?
Please enter a reaction to share it for other people ...
     
 

Best Practices - Residual Income

Expert Tips - Residual Income



Advance yourself in business administration and management



Resources - Residual Income
 

News about Residual Income


     
 

Videos about Residual Income


     
 

Presentations about Residual Income


     
 

Books about Residual Income


     
 

More about Residual Income


     



Accelerate your management career



Compare also: WACC

Special Interest Group Leader

 
 

Return to Management Hub: Decision-making & Valuation  |  Finance & Investing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Residual Income summary and forum.



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2018 12manage - The Executive Fast Track. V15.0 - Last updated: 13-11-2018. All names of their owners.