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Author: Brad Wilson Publisher: ISBN: Category : Economic value added Languages : en Pages :
Book Description
Economic Value Added has been discussed as a financial metric since its creation by Stern Stewart & Co. in the 1980s. Closely tied to value investing, which was pioneered by Benjamin Graham in the late 1920s and early 1930s, E.V.A. has been applied both as a tool for valuation by investors and as a tool for managers to measure the creation of value. While including and allowing for the cost of capital in its calculation, E.V.A. also integrates the present value of future cash flows. This paper discusses not only the origins and application of E.V.A. but also explores the stock prices over seven years of ten companies who had the greatest Market Value Added (the sum of the present value of expected future E.V.A.) and the ten companies who returned the lowest M.V.A. as described by James L. Grant in Foundations of Economic Value Added. In addition, two companies who use E.V.A. as a management tool will be explored to help to determine its validity both as a tool for investors and managers.
Author: Brad Wilson Publisher: ISBN: Category : Economic value added Languages : en Pages :
Book Description
Economic Value Added has been discussed as a financial metric since its creation by Stern Stewart & Co. in the 1980s. Closely tied to value investing, which was pioneered by Benjamin Graham in the late 1920s and early 1930s, E.V.A. has been applied both as a tool for valuation by investors and as a tool for managers to measure the creation of value. While including and allowing for the cost of capital in its calculation, E.V.A. also integrates the present value of future cash flows. This paper discusses not only the origins and application of E.V.A. but also explores the stock prices over seven years of ten companies who had the greatest Market Value Added (the sum of the present value of expected future E.V.A.) and the ten companies who returned the lowest M.V.A. as described by James L. Grant in Foundations of Economic Value Added. In addition, two companies who use E.V.A. as a management tool will be explored to help to determine its validity both as a tool for investors and managers.
Author: Frank J. Fabozzi Publisher: John Wiley & Sons ISBN: 9781883249762 Category : Business & Economics Languages : en Pages : 304
Book Description
Investors, shareholders, and corporate leaders looking for an edge in today's New Economy are moving beyond traditional accounting yardsticks toward new means of gauging performance and profitability. An increasing number of Wall Street analysts and corporate boards are adopting value-based metrics such as EVA, MVA, and CFROI as a measure of a firm's profitability because these standards adjust for all of the firm's cost of capital - equity as well as debt. James Grant tackled the issue of economic value added in its infancy with Foundations of Economic Value Added - one of the first primers on the topic, endorsed by its creator, G. Bennett Stewart. Now, in Value Based Metrics: Foundations and Practice, he and Frank Fabozzi head a team of some of the leading proponents of value based metrics on both the investment management side and the corporate side. This comprehensive reference outlines how corporations and analysts can use value based metrics to more accurately measure the financial performance of individual companies, industries, and economies, as well as how to get an edge in today's turbulent market.
Author: Craig Savarese Publisher: Allen & Unwin ISBN: 9781875889310 Category : Business & Economics Languages : en Pages : 420
Book Description
A true 'how-to' guide for creating and measuring shareholder value in a company. The book guides the reader through detailed implementation steps, and helps companies make important decisions on a wide range of financial management issues relevant to the Australian business environment.
Author: Aswath Damodaran Publisher: Now Publishers Inc ISBN: 1601980140 Category : Business & Economics Languages : en Pages : 102
Book Description
Valuation lies at the heart of much of what we do in finance, whether it is the study of market efficiency and questions about corporate governance or the comparison of different investment decision rules in capital budgeting. In this paper, we consider the theory and evidence on valuation approaches. We begin by surveying the literature on discounted cash flow valuation models, ranging from the first mentions of the dividend discount model to value stocks to the use of excess return models in more recent years. In the second part of the paper, we examine relative valuation models and, in particular, the use of multiples and comparables in valuation and evaluate whether relative valuation models yield more or less precise estimates of value than discounted cash flow models. In the final part of the paper, we set the stage for further research in valuation by noting the estimation challenges we face as companies globalize and become exposed to risk in multiple countries.
Author: James L. Grant Publisher: John Wiley & Sons ISBN: 047147181X Category : Business & Economics Languages : en Pages : 339
Book Description
An updated look at the role of economic profit analysis in the process of wealth creation Grant explains the pivotal role of economic value added (EVA) in the theory of finance, how to measure EVA with standard accounting adjustments, how to use EVA to value companies and their stock, and how to use economic profit principles to identify wealth-creating firms, industries, and even market economies.
Author: Nahid Maleki Nia Publisher: ISBN: Category : Languages : en Pages :
Book Description
One of the latest firm performance assessment measures is economic value added. Based on this measure, firm value depends on two factors: capital return and cost of capital. This research studies the correlation between criteria's related to economic value added (EVA, REVA, MVA) with the intrinsic value of companies and comparison with the correlation between the other variable (cost of capital) with the intrinsic value of companies listed in Tehran Stock Exchange. and specify the criterion related to economic value added (EVA, REVA, MVA) which can be appropriate to evaluate company performance and has more correlation with the intrinsic value of companies? In order to answer this question 110 year - company data are selected from the active companies listed in Tehran Stock Exchange and statistical analysis was done. The results indicate that there are significant relationships between economic value added and market value added with the intrinsic value of company. So market value added has a stronger relationship with the intrinsic value of the company among these three criteria.
Author: Dirian El Amine Publisher: GRIN Verlag ISBN: 3656405069 Category : Business & Economics Languages : en Pages : 34
Book Description
Project Report from the year 2011 in the subject Business economics - Business Management, Corporate Governance, grade: 1,5, University of Cooperative Education Stuttgart; Horb, language: English, abstract: From the contemporary dominance of the shareholder value approach arises more and more the necessity to precisely detect its performance as shareholder value is broadly seen as a significant indicator determining a company’s success or failure. However, measuring the performance of a company’s shareholder value can be very challenging. Hence, the purpose of this paper is to deal with a well-known approach that enables businesses to detect its shareholder value performance: Economic Value Added (EVA). The thesis discusses the correlation between EVA and shareholder value, it further outlines its main drivers. In the second part, the paper elaborates on the specific links of the EVA approach to a regional Sales department and identifies the department’s main leverages on EVA. In order to detect the influence of the main operative decisions on EVA, the thesis introduces the key figure Effect-on-EVA. The applicability of Effect-on-EVA is shown in a model calculation. Above all, this project thesis shall create a profound practical value by sharpening the awareness of how to influence EVA in a positive way. In order to meet the recommended scope, the paper does not elaborate Asset Management, Accounts Receivable Management and Incentive Compensation in detail, but strives to point out the respective links to EVA.
Author: National Research Council Publisher: National Academies Press ISBN: 030909318X Category : Science Languages : en Pages : 291
Book Description
Nutrient recycling, habitat for plants and animals, flood control, and water supply are among the many beneficial services provided by aquatic ecosystems. In making decisions about human activities, such as draining a wetland for a housing development, it is essential to consider both the value of the development and the value of the ecosystem services that could be lost. Despite a growing recognition of the importance of ecosystem services, their value is often overlooked in environmental decision-making. This report identifies methods for assigning economic value to ecosystem servicesâ€"even intangible onesâ€"and calls for greater collaboration between ecologists and economists in such efforts.
Author: Raymond J. Kopp Publisher: Springer Science & Business Media ISBN: 9401153647 Category : Business & Economics Languages : en Pages : 337
Book Description
Contingent valuation (CV) measures what is called passive use value or existence value. The CV method has been used to measure the benefits of environmental policy actions. CV measures of economic value rely on choice. In CV studies, choices are posed to people in surveys; analysts then use the responses to these choice questions to construct monetary measures of value. The specific mechanism used to elicit respondents' choices can take a variety of forms, including asking survey respondents whether they would purchase, vote, or pay for a program or some other well-defined object of choice. It can also be a direct elicitation of the amount each respondent would be willing to pay (WTP) to obtain an object of choice or the amount each respondent would be willing to accept (WTA) in compensation to give it up. This volume is composed of three sections. The first section provides background into the issues underlying the public and academic discussion regarding CV and the reliability of CV estimates of economic value. In addition, this section reviews the theory underlying the measurement of economic value and discusses those aspects of the theory most relevant to CV. The second section focuses on issues that have formed the core of the CV discussions including: sensitivity of WTP estimates to the size of the program offered, tests for theoretical consistency of CV results, and the sensitivity of results to context and numerous other features of the survey and its administration. The final section addresses the application of CV to actual economic valuation tasks and discusses the types of practical problems the CV researcher will encounter.
Author: Brad Wilson
Author: Brad Wilson
Author: Frank J. Fabozzi
Author: Craig Savarese
Author: Aswath Damodaran
Author: James L. Grant
Author: Nahid Maleki Nia
Author: Bhagaban Das
Author: Dirian El Amine
Author: National Research Council
Author: Raymond J. Kopp