Professional Documents
Culture Documents
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WELCOME
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WHAT IS EVATM ?
Most successful performance metric
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ECONOMIC VALUE
ADDED:
Registered trademark of Stern Stewart & Co. of
New York City ( USA)
“QUEST OF VALUE”-Term EVA with a symbol TM as
super script was used.
EVA is a trademark of Stern Stewart & Co. is a
specific method of calculating economic profit.
Peter Drucker discussed EVA “MANAGING FOR
RESULTS”
Concept was popular after Stern Stewart & Co.
marketed it.
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Increasingly popular corporate performance
measure and that is often used by co’s to
evaluate performance-
“EASTON,P.HARRIS,T AND OHLSON,J”
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UNDERSTANDING EVA AND
ITS
COMPONENTS
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COMPONENTS OF EVA:
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EVA: A FLOW CHART
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Measure of wealth a company has created
for its investors
Cumulative measure of corporate
performance
Primary objective of co.- Maximizing MVA
MVA =
[(Shares outstanding x Stock price) + Market
value of preferred stock + Market value of
debt] – Total capital
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EVA V/S MVA
ECONOMIC VALUE ADDED MARKET VALUE ADDED
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The difference between the present value of cash
inflows and the present value of cash outflows.
NPV is used in capital budgeting to analyze the
profitability of an investment or project.
ECONOMIC VALUE ADDED NET PRESENT VALUE
Benett Stewart-to Peccati - decomposition of
measure the value of the the NPV of a financial
firm project.
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CHANGING ORGANISATIONAL BEHAVIOR
GENERATES SUFFICIENT CASH TO REINVEST
SUSTAINABLE GROWTH
PHARMACEUTICAL MARKET PLACE
EVA LINKED COMPENASATION( TCS)
PROFIT PRUNING
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FORTUNE magazine has called EVA “today’s hottest idea”.
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ACKNOWLEDGEMENT IN HUL REPORT
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APPLICATION IN HUL:
HUL.xls
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EVA AND HUL
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CHRONOLOGY OF EVA GROWTH:HUL
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CONCLUSION
we can definitely say that EVA™ has emerged as a
powerful conceptual framework and is practically
implemented in most of successful corporations
across globe. Which incorporates balance sheet data
into an adjusted income statement metric which
works best for companies whose tangible assets
(assets on the balance sheet) correlate with the
market value of assets - as is often the case with
mature industrial companies.
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