What is EVA Momentum?

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Marcio Peres
Manager, Brazil
🔥NEW EVA Momentum is the change in a business's EVA divided by the prior period's sales (revenue). It was developed by Bennet Stewart of EVA Dimensions. It is an application of EVA that measures the EVA growth rate, scaled to the size of the company. As a result, it helps investors determine how much value the company is creating for its shareholders. Because the metric is based on the % change in profit rather than the absolute amount of economic profit, companies of various sizes may be compared. The formula of EVA Momentum is as follows: EVA Momentum = (This year’s EVA – Last year’s EVA) / Last year’s Sales For example, if last year a frim had EVA of $ 6 million and this year they acheeved $ 7 million in EVA, then the comapny increased its EVA by $ 1 million. If last year sales (revenue) were $ 100 million, that represents an EVA Momentum Ratio of 1% ($ 1 million divided by $ 100 million). Have you ever used EVA “Momentum” to evaluate your company's performance? What were th (...) Read more? Sign up for free

 

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Summary
Forum
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What is the Impact of Debt on EVA?
Revised Economic Value Added (REVA)
What is EVA Momentum?
Alternative Methods for Economic Value Added (EVA)
EVA Calculation across a Whole Value Chain
EVA applied to consulting services
Best Practices
EVA growth is what matters
How to Calculate EVA
Calculating EVA for a Proprietary Company
Special Interest Group
Mehul Doshi
CxO / Board
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