of capital structure. EVA provides a tool for all of these
aspects.
EVA is a management tool. It helps managers to evaluate
opportunities, set goals, measure results, and benchmark
performance. EVA is also an accurate basis for value-
oriented incentive compensation schemes.
2.EVA can be integrated in all key processes
Typically, companies use a variety of conflicting measures
such as earnings growth, earnings per share, return on
equity, market share, gross and net margin, cash flow, NPV
and ROIC.
Using a number of different measures leads to conflicting
goals. This is why we will use EVA as a single major
performance measure.
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