What is value added term in economics?

Value added term This usually refers to firmswhere it is defined as the value of the firm’s output minus the value of all its inputs purchased from other firms. It is therefore a measure of the profit earned by a particular firm plus the wages it has paid. As a rule, the more value a firm can add to a product, the more successful it will be. In many countries, the main form of indirect taxation is value-added tax, which is levied on the value created at each stage of production