||It has been suggested that this article be merged into Value added. (Discuss) Proposed since November 2011.|
|This article relies largely or entirely upon a single source. (June 2010)|
- Added Value = Price that the product/service is sold at - cost of producing the product
Added Value can also be defined as the difference between a particular product's final selling price and the direct and indirect input used in making that particular product.
The difference is profit for the firm and its shareholders after all the costs and taxes owed by the business have been paid for that financial year. Value added or any related measure may help investors decide if this is a business that is worthwhile investing on, or that there are other and better opportunities (fixed deposits, debentures).
EXAMPLE A:- A retailer, such as a jeweler could present items in an attractive display, create a luxury feel to the shop and offer a gift wrapping service. This could make the customers more willing to pay higher prices as they think that the products are of higher quality.
For other consultancy measures for shareholder value, see
- Kay, J. (1993) Foundations of Corporate Success, Oxford: Oxford University Press.