Advantages of EVA Analysis :

1. In various cases, company pay bonuses to the employees on the basis of EVA generated. Since a higher EVA implies higher bonuses to the employees, it promotes the employees for working hard for generating higher revenue.

2. Using EVA , company can evaluate the projects independently and hence decide on whether to execute the project or not

3. It helps the company in monitoring the problem areas and hence taking corrective action to resolve those problems.

4. Unlike accounting profit, such as EBIT, Net Income and EPS, EVA is based on the idea that a business must cover both the operating costs as well as the capital costs and hence it presents a better and true picture of the company to the owners, creditors, employees, shareholders and all other interested parties.

5. It also helps the owners of the company to identify the best person to run the company effectively and efficiently.

However there are some disadvantages of EVA like it is difficult to compute and also it does not take into account inflation into its calculation. Therefore company should take into account above advantages and disadvantages before deciding whether to implement EVA or not