Introduction:
Being able to measure the value of an investment is becoming increasingly important today. This is due to increased global competition and financial pressure. The methods of measurement, however, are numerous and widely debated. Businesses find themselves using 1 performance measurement method for taxation purposes, another for bonus determination, and yet another for reporting to their shareholders. Ideally, only 1 method should be used to cover all the different purposes.
Businesses have a dire need for a more accurate and efficient method of value measurement. This project explores EVA, which is a fairly recent addition to the existing list of performance measurement methods. Companies that use EVA include AT&T, Coca-Cola and Quaker Oats and many other successful companies.
Evolution of EVA
We have noticed that the stock prices of many companies (especially internet stocks) seem to rise rapidly despite large reported losses on their Income Statements. How can values go up, up, and up with such low earnings on the Income Statement? This question has raised serious concerns that Net Income has little to do with the values of companies. So why the disconnect? Well, net income is derived from past events on a short-term basis while values of companies are derived from future events over the long-term. Consequently, managers are looking for better measures of financial performance. In recent years, such a measurement has emerged. It's called Economic Value Added or EVA.
Coca-Cola is one of the many companies that adopted EVA for measuring its performance
Number of Pages of Project Report:61
Package Includes: Project Report
Project Format: Document (.doc)
Table of Contents of Project Report:
1. Introduction to EVA
- EVA- New Tool for Performance Management (PM)
- Traditional measures of PM
- Modern Measuring Tool for PM - EVA (Economic Value Added)
- Evolution of EVA
- How Companies Have Used EVA- making it a popular Concept
2. Concept of EVA
3. Steps in calculating EVA
4. Applications (4Ms of EVA)
5. Advantages & Disadvantages of EVA
6. Best Tool in HR & Finance
- Human Resources And Finance (Case Of GODREJ LTD.)
7. Making EVA Work
- Strategies for increasing EVA
8. Companies using EVA
9. Is EVA the best tool?
10. Reliability of EVA
11. Conclusion
