Best-Practice EVA: The Definitive Guide to Measuring and Maximizing Shareholder Value

Best-Practice EVA tells the new EVA story from the ground up.Stewart covers EVA essentials the classic economic profitversion of EVA in the first three chapters of the book. Heshows readers how simple and intuitive EVA really is, how it isdefined, and why it is better than all other measures of corporateprofit. You discover how it naturally guides managers into makingall the right decisions the ones that will truly maximizevalue. You see how to use it in profit-sharing bonus plans thatcreate the powerful incentives of an owner. Later, Stewartintroduces new ratios that make EVA much more powerful and mucheasier to use than ever before. The pinnacle of the new ratioframework is EVA Momentum, calculated by taking the change in EVAversus the prior period, and dividing by the revenues in the priorperiod. It measures the growth rate in EVA, scaled to the salessize of the business. It is the only corporate performance ratiowhere bigger always is better, because it gets bigger when EVAdoes, which means it should be every company's most importantfinancial goal, the one ratio metric that everyone aims to maximizeas the key measure of corporate success. Stewart then walks throughthe nuts and bolts of Best-Practice EVA, kicking off with anin-depth look at EVA Margin, or EVA as a percent of sales.It s a key productivity metric, and Stewart s candidateto replace ROI. The last link in the Best-Practice program isPRVit the EVA market score report. Stewart shows how to readand interpret the report, how the score is determined, and whyinvestors are turning to it to screen and rate stocks. He alsoshows why it is finding a home with CFOs and IR directors who wantinsights into how the market is pricing their stock. The bookconcludes with battle-tested tips from the firing line, practicalsuggestions for how you can test drive and adopt Best-Practice EVAat your company.