EVA: The Real Key to Creating Wealth

EVA: The Real Key to Creating Wealth

by Al Ehrbar
     
 

Called "today's hottest financial idea and getting hotter" by Fortune magazine, Economic Value Added (EVA) is the topic of conversation in financial circles around the world, from Germany and Japan to Singapore and South Africa. A revolutionary strategy for creating corporate and shareholder wealth that measures a company's real profitability, it has been adopted

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Overview

Called "today's hottest financial idea and getting hotter" by Fortune magazine, Economic Value Added (EVA) is the topic of conversation in financial circles around the world, from Germany and Japan to Singapore and South Africa. A revolutionary strategy for creating corporate and shareholder wealth that measures a company's real profitability, it has been adopted by such prominent corporations as Coca-Cola, Eli Lilly, and Siemens AG-with spectacular financial results. Yet, despite its increasing visibility, most executives still only have a vague notion of what EVA is and what it can do for their company. This groundbreaking book explains and clarifies all. Written by Al Ehrbar, a leading business journalist and senior vice president at EVA inventor Stern Stewart & Co., EVA: The Real Key to Creating Wealth provides a complete, accessible overview that examines how EVA works, how it is measured, what it can do to structure incentives for employees, and why it is as potent as it is. At its most basic, Economic Value Added is a measure of corporate performance that differs from most others by charging profit for the cost of all the capital a company employs, including equity. However, as Ehrbar explains, EVA is much more: "It is the framework for a complete financial management and incentive compensation system that can guide every decision a company makes.that can transform corporate culture, that can improve the working lives of everyone in an organization by making them more successful, and that can help them produce greater wealth for shareholders, customers, and themselves." To help translate principle into real-world practice, Ehrbar presents revealing case histories of EVA success stories, including those of Briggs & Stratton, the U.S. Postal Service, and Coca-Cola, which was catapulted from mediocrity to the number one wealth creator in the world with the addition of EVA. An in-depth look at a breakthrough idea whose impact is being felt from corporate boardrooms to Wall Street, this indispensable book is must reading for business leaders looking to fully grasp-and profit from-"the real key to creating wealth."

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Product Details

ISBN-13:
9780471298601
Publisher:
Wiley
Publication date:
10/28/1998
Pages:
256
Product dimensions:
6.20(w) x 9.30(h) x 0.91(d)

What People are saying about this

Alfred J. Jackson
EVA: The Real Key to Creating Wealth does a masterful job of blending the theoretical and the practical. It demonstrates conclusively - and once and for all - how EVA actually changes the behavior of employees. (Alfred J. Jackson, Director of Global Equity Research, Credit Suisse First Boston)
Eugene B. Vesell
Al Ehrbar has clearly articulated what drives stock prices over the long run. His message is useful to both investors and business managers, and the case histories in his book demonstrate what can be accomplished by paying attention to the basic principles of EVA. (Eugene B. Vesell, Managing Director, Oppenheimer Capital)
William T. Esrey
This book shows in a clear and compelling way how EVA can be a competitive advantage in the race to create shareholder value. (William T. Esrey, Chairman & CEO, Sprint Corporation)
Steven Einhorn
EVA analysis is at the heart of understanding how companies create shareholder wealth. Most importantly, it helps investors measure and understand those factors that create or destroy value. (Steven Einhorn, Director of Global Investment Research, Goldman, Sachs & Co.)
Merton H. Miller
For corporate directors who still believe that they are doing the best for shareholders...this book is must reading. (Merton H. Miller, Nobel Laureate in Economics)

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