Added Value Or Value Added Definition

Value added is an economic concept that refers to the increase in the value of a good or service as a result of a production process. The concept is often used in the context of economic development, as it can be used to measure the effectiveness of a country’s or company’s production processes.

The term ‘value added’ can be used in different ways, but most commonly it refers to the difference between the price of a good or service and the cost of the inputs that were used to produce it. In other words, it is the amount by which the value of a product or service has been increased at each stage of production.

The value added by a company can be measured by its sales minus the cost of its inputs. Value added can also be expressed as the difference between the output of a company and the input of its suppliers.

Value added is an important concept because it allows for comparisons of economic activity across different sectors and industries. It is also a useful tool for measuring productivity and competitiveness.