Contributed Value Definition
There are a few different ways to define contributed value. In business, contributed value is typically defined as the portion of the company’s total value that is attributable to each individual shareholder. This can be calculated by subtracting the book value of equity from the market value of equity and dividing by the number of shares outstanding.
In economics, contributed value is often thought of as the difference between the market price of a good or service and the marginal cost of producing it. This concept can be applied to both individuals and businesses. For an individual, their contributed value is the amount they are willing to work for in order to produce a good or service. For a business, their contributed value is equal to their marginal revenue minus their marginal cost.
Ultimately, contributed value is about creating something of worth that would not exist without your efforts. Whether you’re an individual or a business, if you’re able to add value to the world around you, you’re contributing in a positive way.
