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- Herausgeber: Business Book Summaries
- Kategorie: Fachliteratur
- Sprache: Englisch
The must-read summary of Joel Stern and John Shiely's book: "The EVA Challenge: Implementing Value-Added Change in an Organization".
This complete summary of the ideas from Joel Stern and John Shiely's book "The EVA Challenge" shows how Economic Value Added is the best and most direct measure of whether a business is creating wealth when the cost of its capital has been taken into account. EVA also aligns precisely the interests of the company’s owners with the interests of the managers in a way that is free of the distortions and vagaries of accounting conventions. In their book, the authors demonstrate that effectively harnessing EVA will require three components: a measurement system, an incentive system and a financial management system. This summary explains each of these components and how you can implement them to analyse the success of a business.
Added-value of this summary:
• Save time
• Understand key concepts
• Expand your knowledge
To learn more, read "The EVA Challenge" and find out how you can master the art of Economic Value Added.
Das E-Book können Sie in Legimi-Apps oder einer beliebigen App lesen, die das folgende Format unterstützen:
Seitenzahl: 30
Veröffentlichungsjahr: 2014
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Book Presentation: The EVA Challenge by Joel Stern and John Shiely
Book Abstract
About the Author
Important Note About This Ebook
Summary of The EVA Challenge (Joel Stern and John Shiely)
Section 1: The Problem With Conventional Valuations
Section 2: The Solution – EVA
Section 3: The Six Keys Of EVA Implementation
Section 4: A Working Example
Book Presentation: The EVA Challenge by Joel Stern and John Shiely
Book Abstract
Main Idea
Economic Value Added (EVA) is the best and most direct measure of whether a business is creating wealth when the cost of its capital has been taken into account. EVA also aligns precisely the interests of the company’s owners (its shareholders) with the interests of the managers in a way that is free of the distortions and vagaries of accounting conventions.
The challenge is to harness EVA effectively to increase true economic profitability. That will require three components – a measurement system, an incentive system and a financial management system which are all EVA based. Without those components, it will be impossible to tell whether or not a business is succeeding in making its capital worth more over time. With those elements properly implemented, EVA principles will unerringly guide the company onwards and upwards as managers and employees focus on one specific objective: “How do we improve our EVA?”
In the final analysis, EVA is the best and most definitive financial performance measure. Smart com panies worldwide are harnessing EVA to optimize their creation of shareholder wealth over time by making it the focal point for all reporting, planning and decision making functions.
About the Author
JOEL STERN is cofounder and Managing Partner of Stern Stewart & Co., a management consulting practice specializing in financial economics, corporate performance measurement, corporate valuation and incentive compensation. Mr. Stern currently serves on the faculties of five graduate business schools. He is a leading advocate of the concept of shareholder value.
JOHN SHIELY is President of Briggs & Stratton Corporation, the world’s largest producer of air-cooled gasoline engines. Mr. Shiely earned a bachelor of business administration in accounting from Notre Dame University, a JD from Marquette University Law School and a master of management degree from Northwestern University. Briggs & Stratton Corporation is one of the most successful implementers of EVA.
The Stern Stewart & Co. Web site is located athttp://www.eva.com.
Important Note About This Ebook
This is a summary and not a critique or a review of the book. It does not offer judgment or opinion on the content of the book. This summary may not be organized chapter-wise but is an overview of the main ideas, viewpoints and arguments from the book as a whole. This means that the organization of this summary is not a representation of the book.
Summary of The EVA Challenge (Joel Stern and John Shiely)
Section 1: The Problem With Conventional Valuations
Main Idea
How do you value a business?
The conventional measures are to use:
Profitability – the existence of excess cash flows.Earnings per share (EPS).The price / earnings ratio (P/E).Return on equity (ROE), investment (ROI), net assets (RONA).The only problem is all of these measures can be distorted in the short term by management accounting practices which are perfectly within the law. The situation becomes even murkier in one-off situations like acquisitions and leveraged buy-outs.
Thus, a consistent, unambiguous and rational way to value a business is required in order to gauge whether or not the management is actually creating more value over time.
Supporting Ideas
The two major developments in American capitalism which have muddied the waters when it comes to valuing a business are:
The split between ownership and control.
