Case Studies on EVA® as a Performance Indicator

• Main Authors: Tun-Min Lo, 羅敦敏
• Other Authors: none
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/73709344439776348602

碩士 === 國立中央大學 === 財務金融研究所 === 90 === Since 90s, EVA® has become one of the most popular tools in value-based management and valuation. But in the late 90s, many EVA®-adopted companies gave up using it and returned to traditional accounting measurements. The main purpose of this paper is to investigate whether the problems of EVA® as a performance indicator are inherent in its original design, or are due to the unexpected issues in the implementation stage. This paper is organized as follows. First, it reviews literature on EVA® as a performance indicator and solutions provided by both the academician and practitioners. Second, it provided two case studies, AT&T and domestic company. Finally, it concludes the results. There are some findings obtained in the results. (1) Though EVA® has some advantages over other performance indicators, it is a post-financial measure. Enterprises need good strategies and value drivers to generate good EVA® numbers. (2) For the EVA® program to succeed, it must have full backing of the CEO and senior managers. (3) To reveal the true value of a multinational, it should design proper EVA® adjustments according to each country’s accounting rules, laws and industry characteristics. (4) Enterprises should disclose full EVA® information to investors, including adjustments and bonus plan. (5) Enterprises can use Balanced Scorecard and value-reporting tools to support the EVA® performance indicator.