EVA and Value Management -- A Practical Guide

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Features: Many outstanding business leaders have long claimed that EVA (Economic Value Added) and value management have significant advantages, which have been proven in the real world. This book defines and discusses the basic concepts of EVA and value management; proposes a simple and easy-to-understand method to ensure the successful implementation of EVA in companies; and finally provides a comprehensive and candid overview of value management and EVA. It is today's most valuable practical guide to EVA, helping managers implement efficient performance-driven management plans. Economic Value Added and value management are not magic wands; they cannot guarantee continuous success. However, they are a powerful set of management tools for creating and increasing shareholder value, as demonstrated in countless cases. This book covers the key elements of mastering EVA and VBM to create shareholder value and delves into the critical steps of EVA implementation, including: determining the cost of capital, applying accounting adjustments to better measure corporate performance, identifying value drivers to improve operational performance, and attempting to apply EVA in managing compensation. EVA and Value Management provides clear, concise, and up-to-date information about EVA and VBM—what they are, how they work, how they work for you, and demonstrates how to use this information to achieve your desired results. The book is divided into three parts: the first two parts describe the issues of management compensation, with the first part focusing on strategy and concepts, while the second part details the practical operation of dividend plans related to EVA. The second part also elaborates on a series of other technical issues, including the cost of capital, accounting adjustments for EVA, and alternative value measurement methods such as CFROI. The second part aims to answer some of the questions frequently asked by financial professionals, accountants, and value management professionals. We do not intend to answer all technical questions, but we believe that in addressing complex EVA management implementation issues in a straightforward and comprehensive manner, our work is more in-depth than any other published literature. In the third part—the final part of this book—we present our own conclusions, including some practical experience from working on EVA. We also share our views on the future of EVA and value-based performance measurement methods.