Top PDF EVA and Value-Based Management

EVA and Value-Based Management

EVA and Value-Based Management

Kudos to S. David Young and Stephen F. O’Byrne, management consultants who largely steer clear of their industry’s usual empty catchphrases and superfi cial hype. Instead, their lucid explanation of the importance of shareholder value takes center stage. The heftiness of EVA and Value-Based Management may be daunting, but most readers will be satisfi ed with Part I’s strategic overview. The concepts reappear in Part II accompanied by a wealth of technical details, calculations and case studies to help fi nance professionals with nitty-gritty implementation of EVA (Economic Value Added) programs. The book honestly assesses EVA’s power to motivate managers, noting that some companies just are not well-suited for this performance metric. getAbstract.com prescribes this book to corporate executives who have overdosed on consultant jargon but still want to drive value growth in their companies, and to fi nance specialists who seek a comprehensive roadmap to EVA implementation.
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Is EVA a Superior Measure of Shareholder Value?  Evidence from CNX Nifty Constituent Firms

Is EVA a Superior Measure of Shareholder Value? Evidence from CNX Nifty Constituent Firms

Value-based management strategies existed since businesses evolved. Under EVA approach performance measurement gains a new meaning in contrast with the traditional approach which is merely based on the simple notions of accounting profits and the relevant ratios derived from them, such as the return on equity (ROE) and the return on assets (ROA). The difference is that the traditional performance measurement benchmarks do not consider the cost of invested capital (equity and debt) in order to generate the profits made by a company. Thus, under the traditional approach two companies that have the same ROE would be considered as equally successful, whereas under the EVA approach the same conclusion could not be reached if these two firms had a different cost of capital, in other words if their economic profit or residual income was different.
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EVA AND TRADITIONAL ACCOUNTING BASED FINANCIAL PERFORMANCE MEASURES: WHICH ONE IS REALLY INFORMATIVE IN EXPLICATING VARIATION IN SHAREHOLDERS’ VALUE ADDED?

EVA AND TRADITIONAL ACCOUNTING BASED FINANCIAL PERFORMANCE MEASURES: WHICH ONE IS REALLY INFORMATIVE IN EXPLICATING VARIATION IN SHAREHOLDERS’ VALUE ADDED?

can be believed that measures of corporate financial performance should highly correlates with shareholder wealth creation. Shareholder wealth creation, a key corporate objective of many companies, is accomplished when the return from capital employed in the business exceed the cost of acquiring funds. Modern value based performance measures are based mainly on Net Present Value , Free Cash Flow, and cost of capital approaches that have objective to create and maximize shareholders‟ value. Value-based performance measures stimulate all business proceedings towards creation of shareholders wealth. Value based management approach places the concerns of shareholders above others stakeholders and claims that organization‟s strategy are stand-in for creation of value for its shareholders. Among the various value based performance measures, the most reliable measure of corporate performance is Economic Value Added (EVA) which has been coined and popularized by Stern Stewart & Co. in 1991. Economic Value Added or EVA is a performance metric used to estimate the true economic profit generated by a firm. It serves as an indicator of management performance. EVA measures whether the operating profit is sufficient enough to cover the cost of capital employed. It is a performance metric based on the concept of residual wealth that measures company's financial potency and is calculated by subtracting cost of capital from its operating profit. EVA t = NOPAT t – (WACC t x CE t-1 ).
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THE UTILISATION OF VALUE BASED MANAGEMENT IN THE STRATEGIC MANAGEMENT OF GERMAN’S AUTOMOTIVE INDUSTRY

THE UTILISATION OF VALUE BASED MANAGEMENT IN THE STRATEGIC MANAGEMENT OF GERMAN’S AUTOMOTIVE INDUSTRY

parameters (Voigt 2012; Weber et al. 2002; Stührenberg & Streich 2010; Lorson 2004). It was developed by Stewart (1990). This approach is an excess earning method as well as a concept based on residual income. According to Stewart (1990, p. 2), EVA is ‘operating profits less the cost of all capital employed to produce those earnings’. It measures an enterprise’s value growth in relation to a specific period. Its calculation is not based on cash flows, but on the operating profit after taxes as reported in the annual financial statement (Düsterlho 2003, p. 65). This method focuses on the period-related difference between an enterprise’s operating profits generated by the capital employed and the costs resulting from the investment of capital (Weber et al. 2002a). This difference is referred to as residual profit.
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Course 8: Creating Value through Financial Management

Course 8: Creating Value through Financial Management

The idea behind EVA is rooted in economic income as opposed to accounting income. As economic income moves up or down, so goes the value of the business. The problem is that calculating economic income is not easy; it requires hundreds of adjustments. For example, under traditional accounting we would expense cash disbursed for research and development (R & D), but in arriving at economic income we would capitalize R & D since it provides a future economic benefit. The list of adjustments from accounting to economic is extensive: depreciation, gains / losses, reserves, deferred taxes, etc. Since EVA is at the center of Value Based Management, it is important to keep the number of adjustments to those material items that significantly distort value. This is important since managers throughout the entire organization will need to understand how EVA is calculated. Keeping EVA simple will go a long way towards successful implementation.
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The Effect of Economic Value Added (EVA), Market Value Added (MVA), Refined Economic Value Added (REVA) on Stock Prices and Returns Stock at Manufacturing Industries Who Listed on Indonesia Stock Exchange (BEI)

The Effect of Economic Value Added (EVA), Market Value Added (MVA), Refined Economic Value Added (REVA) on Stock Prices and Returns Stock at Manufacturing Industries Who Listed on Indonesia Stock Exchange (BEI)

According to [3] categorizes company performance measurements into three categories, namely: (1) Earning Measurement, (2) Cash Flow Measurement, and (3) Value Measurement. The performance measurement of company that based on value system is periodically measured in the context of changes in value. Performance measurement based on value are namely by economic value added (EVA), market value added (MVA), and refined economic value added (REVA) which are developments in the form of measurement of economic value added (EVA). Thus has meaning whether increasing value means also increasing investment long-term shareholder returns. Based on [4] states that value measures are considered to have capabilities that exceed other performance measurements, because they take into account all the factors associated with the creation (value) of the company that have an impact on the increasing prosperity of shareholders.
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The implications of intellectual capital on performance measurement and corporate performance

The implications of intellectual capital on performance measurement and corporate performance

Table 1 considers the main financial performance measures employed by firms. High IC firms are seen to rely more heavily on Profitability as a performance measure than low IC firms. Moreover, Shareholder Value Analysis (SVA) is strongly associated with high levels of human, structural and relational capital, while Economic Value Added (EVA) is associated with structural capital. Both of these value-based approaches require appropriate recognition of the value of IC to operate effectively. We also observe that Target Profit is associated with a higher emphasis on IC. We conclude from these initial observations that firms investing heavily in IC tend to place greater emphasis on profitability, value-based, and target profit performance measures than firms with little IC investment. The appropriateness of such measures as reliable indicators of performance rests largely on the extent to which they incorporate the costs and benefits of IC.
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The Role of EVA in Determining Company’s Value through the Ownership Structure and Internal Factors

The Role of EVA in Determining Company’s Value through the Ownership Structure and Internal Factors

In general, companies listed on the IDX have individual constraints or supervision, especially companies owned by descendants of Indonesian citizens, this will certainly influence various decisions taken by management that no longer reflect purely the interests of other shareholders. Theoretically this means that the interests of management and shareholders will be relatively in line. Therefore it is not surprising that many family members have a large percentage of share ownership which often has key positions in the company (Fauzan et al., 2012). The variable ownership by executive or management is often a starting point for the emergence of agency conflicts in the bag. According to Jensen and Meckling (1976) agency conflict when the management does not control 100% of its shares, or in other words when there is a composition of ownership of the company outside of management, there will be agency problems (Suteja and Manihuruk, 2009) found that share ownership variables had a negative influence on firm value. Sinarmayaran (2016) and Suranta (2003), claimed that ownership has not a significant influence on the value of the company.
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TCO, NPV, EVA, IRR, ROI Getting the Terms Right

TCO, NPV, EVA, IRR, ROI Getting the Terms Right

One of the flaws in all of the above metrics is that they work very well for companies that have an industrial capital structure in the form of plants and buildings. But they may be less appropriate where the main asset of the company is intellectual property, goodwill or marketing allure. As a result financial theorists are kept busy trying to come up with better measures for project analysis. EVA is one such measure and at its simplest EVA looks to measure the effects that a new project will have on share value. This is very appealing to the folks with a 50,000-foot perspective, but most IT and line-of-business managers are held to somewhat more mundane issues such as departmental profitability and budgets. Unfortunately as the recent stock market highs and lows have taught many of us, stock prices by nature are not entirely logical and there are many factors which affect a company’s stock that are not based on financial reality.
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Running head: THE VALUE-BASED CUSTOMER RELATIONSHIP MANAGEMENT. The Value-Based Customer Relationship Management. Arman Kanooni. Capella University

Running head: THE VALUE-BASED CUSTOMER RELATIONSHIP MANAGEMENT. The Value-Based Customer Relationship Management. Arman Kanooni. Capella University

With the downfall of many Customer Relationship Management (CRM) projects and the negative return on investment, one could wonder if the CRM will be yet another silver bullet technological hype promising to produce a seamless one to one relationship between a company and its customers. The companies are facing fierce competition in a global marketplace. The customers have higher expectations, less allegiance, and would like to pay less to firms which supply the products and services. Thus, it is vital to have an effective CRM solution to outlive and stay in business.

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SME Growth: The Role of Government Grant

SME Growth: The Role of Government Grant

In order to develop the quantitative analyses of the study, a known method of calculating company value EVA - Economic Value Added –has been used (Bennet Stewart, 2000). The fundamental concept, on which modern financial theory is based, is that an enterprise is economically profitable if it produces a superior return to the financial funds it uses. Even if this statement seems obvious, even more often the success of an enterprise is measured with regards to profitable gains, return on equity (ROE), rate of growth, cash-flow, gross operative margin, market share and in the case of listed enterprises the relationship between price and earnings (P/E), and earnings per share (EPS). Even if all of these elements are relevant to the performance evaluation, none of them refers directly to the concept here expressed and it is highly possible that enterprises with a high growth level of ROE, P/E, etc. do not have a high economic return rate.
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Value Based Management and Corporate Governance: a Study of Serbian Corporations

Value Based Management and Corporate Governance: a Study of Serbian Corporations

Serbia has a civil law legal system, and belongs to the group of emerging and developing countries. In many studies (e.g., Johnson et al., 2000; La Porta et al., 2000) civil law countries have been linked with strong regulation but weak effective (institutional) protection of investors, particularly minority shareholders. In the case of Serbia this is confirmed in The World Bank global report Doing Business 2011, which shows that Serbia ranks better in legal (measured by strength of investor protection index) than in effective judicial (measured by enforcing contracts index) protection of investors. Among 183 economies Serbia is ranked 74 th in protecting investors, and 94 th i n enforcing contracts. Kaličanin (2005) argues that Serbian corporations are not motivated to be transparent in business and do not feel pressure from shareholders to deliver the required returns or to create value for them. The shareholders are subjects of attention only if they are dominant (which is often); but then the problem of protecting minority shareholders arises.
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Revenue Cycle Management + Value-Based Medicine

Revenue Cycle Management + Value-Based Medicine

In addition to historical information, this presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include both implied and express statements regarding the company’s financial condition, growth strategy, business development efforts, service offerings, and service delivery models. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from the historical results or from any results expressed or implied by such forward- looking statements. Risks that could affect the company’s future performance include, but are not limited to, our ability to adapt to evolving technology and industry standards; our ability to implement our growth strategy; our ability to retain management and other qualified personnel; failure to prevent disruptions in service or damage to our third-party providers’ data centers; failure to avoid liability for the use of content we provide; regulation of the healthcare information technology industry; our ability to ensure our solutions meet industry and government standards; failure to maintain adequate security measures for our customers’ confidential information and personal identifiable information and their patients’ protected health information; our ability to obtain new provider clients; failure of the HITECH Act and other incentive programs to be fully implemented or funded by the government; our ability to implement our strategic relationships as currently intended; failure to establish, protect or enforce our intellectual property; restrictions in our credit facility and future indebtedness.
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Value Based Purchasing and Nursing Case Management

Value Based Purchasing and Nursing Case Management

The implementation of value based programs has stimulated additional inter- est in the use of nursing case management on a community wide basis. This in- cludes use of it in primary and ambulatory care. This role emphasizes the use of case management for coordination of services at the community level. This is the arena where most health care services are delivered. The community level is also the location of primary care and ambulatory care services that are important to value based purchasing [15]. Nursing case managers are largely the drivers of care management and disease prevention programs for patients that are high risk and/or high cost, the focus of value based purchasing programs [14].
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HP STORAGEWORKS EVA DYNAMIC CAPACITY MANAGEMENT SOFTWARE

HP STORAGEWORKS EVA DYNAMIC CAPACITY MANAGEMENT SOFTWARE

You will not be able to change the host-based authentication option during subsequent installs. To set credentials on a supported host server: 1. Use the operating system feature to create the appropriate group: · HP Host Agent Admins (supported Windows host) · hphaadm (all other supported hosts) IMPORTANT: You must specify the group name exactly as shown in this step; otherwise, authentication will fail. See your operating system documentation for instructions about creating groups. 2. Create users and assign them to a group (only one user is required for authentication). Enter a name and password
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Value Management

Value Management

in some sections of project or providing additional budget to cover overrun cost. Similarly, for time overrun case, they may plan some program such as fast tracking or time crashing for time reduction. Therefore, the role of EVM as well as correct and on time forecasting is very important to achieve project goals. This research includes implementation and improvement on EV to achieve a forecasting EAC based on statistical and econometrics techniques and traditional EV indexes as well.

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Healthy Growth of Value Based Organic Food Chains:
Management, value communication and perspectives of growing values based food chains

Healthy Growth of Value Based Organic Food Chains: Management, value communication and perspectives of growing values based food chains

The workshop goal is to communicate and to discuss the preliminary results of the EU pro- ject Healthy Growth - From Niche to Volume with Integrity and Trust (HG). The project deals with different aspects of value based organic food chains. The project participants will pre- sent the results achieved so far from different points of view: researchers and producers. The case studies will give us an insight to practices of management, promotion and commu- nication of organic value at different links of the value chain, from producers to consumers. Agenda

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KNOWLEDGE AS THE KEY INDICATOR TOWARD ENHANCING ORGANIZATIONAL VALUE IN DEVELOPING COUNTRIES

KNOWLEDGE AS THE KEY INDICATOR TOWARD ENHANCING ORGANIZATIONAL VALUE IN DEVELOPING COUNTRIES

More and more the use of modern techniques (tools) has proven to remedy this weakness. There are three new tools mentioned in the Stern Stewart article: ABC (Activity Based Costing), BSC (Balanced Scorecard) and EVA (Economic Value Added). While knowing that these three tools do not cover all issues in similar way, hence each of them has its own specifics; the main issue to be discussed is if those three frameworks can be used together or simultaneously, or they can be used only separately (individually) (Shinder & McDowell, 1999ë Burn, et.al. 2007; Drury, 2008, Cuc, 2009; Morard & Balu, 2009; Sharma & Kumar, 2010).
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Flourish Wealth Management, Inc.

Flourish Wealth Management, Inc.

The specific manner in which fees are charged by FWM is established in a client’s written agreement with FWM. Generally, Investment Management and Employee Benefit Plan clients will be invoiced in advance at the beginning of each calendar quarter based upon the value (market value based on independent third party sources or fair market value in the absence of market value; client account balances on which FWM calculates fees may vary from account custodial statements based on independent valuations and other accounting variances, including mechanisms for including accrued interest in account statements) of the client’s account at the end of the previous quarter. New accounts are charged a prorated fee for the remainder of the quarter in which the account is incepted or will not be billed until the next quarter.
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FINANCIAL PERFORMANCE EVALUATION OF TURKISH NON-METALLIC MINERAL PRODUCTS COMPANIES LISTED AT BORSA ISTANBUL BY USING EVA

FINANCIAL PERFORMANCE EVALUATION OF TURKISH NON-METALLIC MINERAL PRODUCTS COMPANIES LISTED AT BORSA ISTANBUL BY USING EVA

EVA is a value calculated by extracting invested capital that is used to acquire the profit from the company’s net operating profit after tax. Additionally, it is one of the most widely accepted value based performance measures in terms of evaluating company value, creating a different culture by constituting the concept of value creation in a business and managing companies effectively. Therefore, the basic logic of EVA is measuring the value precisely and maximizing it for business owners. This approach takes into account the cost of external and internal sources allocated and thus, EVA considers expenses, such as R&D and education expenditures, that will contribute the future value of companies as a value created rather than an expense (Garrison et al., 2011).
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