Value added
In business, total value added is calculated by tabulating the unit value added (measured by summing unit profit [the difference between sale price and production cost], unit depreciation cost, and unit labor cost) per each unit of product sold. Thus, total value added is equivalent to revenue minus intermediate consumption. Value added is a higher portion of revenue for integrated companies (e.g. manufacturing companies) and a lower portion of revenue for less integrated companies (e.g. retail companies); total value added is very closely approximated by compensation of employees, which represents a return to labor, plus earnings before taxes, representative of a return to capital.