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Economic Value Added
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EVA is a way of measuring a firm's profitability. EVA is NOPAT minus a charge for all capital invested in the business (Byrne 1). A more intuitive way to think of EVA is as the difference between a firms NOPAT and its total cost of capital (Kramer & Pushner 40). Stern Staurt's numerical definiti ....
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.... of corporate performance; MVA is a dynamic, forward looking market performance measure. "MVA is a market generated number calculated by subtracting the Capital invested in a firm © from the sum (V) of the total market value of the firm's equity and book value of debt: MVA=Vt-Ct" (Kramer & Pushner 42). Al Ehrbar describes MVA as exactly equivalent to the stock market's estimate of the NPV of a company. In 1998 CSX Corperation introduced EVA criteria to the fast growing but low margin CSX Inte.... |
| Number of words: 1959 |
Approximate pages: 8 |
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