EVA growth is what matters

Performance Measurement
Knowledge Center

Best Practices
Peter Rubin, USA

EVA growth is what matters

Improving EVA should be the goal of any major firm. After all, shareholders, who are providing the capital for the firm, have options to invest money elsewhere. To keep them onboard, managers must focus on growing the business when the returns are greater than the cost of capital, and on re-deploying capital when the returns are less than the cost of capital.
On top of this, they must try to improve returns on existing capital and arrange an optimal capital structure (debt/equity). How management precisely accomplishes the above is highly complex, depends on many interrelated and dynamic forces, and requires skillful decisions.
But in any case, EVA is the transparent system that is needed to ensure managers take these decisions responsibly and are accountable.

  Mehul Doshi
CxO / Board, India
 

EVA over a Period of Time

Peter you have highlighted a good post for organizing EVA improvement. A point to add is EVA should not be looked from ...

 

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Special Interest Group
Mehul Doshi
CxO / Board

Performance Measurement
Knowledge Center



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