Added Value Definition
There are a number of ways to define added value. In general, it can be described as the difference between the selling price of a good or service and the cost of producing it. Added value can also be thought of as the amount of money that a company makes after deducting the cost of goods sold from total revenue.
Another way to look at added value is to consider it the portion of a company’s revenue that is not attributable to the cost of its inputs. This means that added value is what is left over after all expenses have been paid. This leftover amount can then be used to reinvest in the business, pay dividends to shareholders, or fund other activities.
