Best-Practice EVA: The Definitive Guide to Measuring and Maximizing Shareholder Value

I am sitting at my desk leafing through my original copy of Bennett's first book: The Quest for Value (1991). Many pages have my hand written notes. I needed them. I used the book as a guide to implementing EVA in several organizations. My only complaint with the first book; 739 pages with no index. Bennett's latest book shows the tremendous advances he has made with EVA concepts, their application and authoring books. 'Best Practice EVA' starts with the shortcomings of his first generation EVA model. This is a courageous beginning to those of us who have followed Bennett's inspirations on EVA since 1991. He then covers the familiar ground of the basic EVA model, including the economic profit version of EVA. His highest achievement, in my view, is the discovery and development of EVA Momentum. Finally we have a financial ratio that can be 'maximized' if you will; more is truly better with EVA Momentum. All of the improved EVA framework has been nicely packaged in a book of readable length (and with an index this time). Bennett has even maintained his wit and humor about this topic since 1991. I highly recommend reading 'Best Practice EVA' if you truly want to understand how to improve the shareholder value of your organization.

After 30 years as a successful private investor, I have accumulated a rather large library of respected investing, accounting, and finance books. Included in my library are two different editions of Warren Buffet’s favorites: Graham and Dodd’s ‘Security Analysis’ and Graham’s ‘Intelligent Investor’. I also have a copy of G. Bennett Stewart’s first book, the 1991, ‘Quest for Value’ which I found to be revolutionary. Fast forward to 2013, and G. Bennett Steward’s newest book, ‘Best Practice EVA’ and you will find a testament to what 22 years of continued focus, innovation, and refinement have done to ameliorate his revolutionary and logical concept of Value Creation.When I am investing in a company, understanding and tracking its EVA or Value Creation is quintessential.Without reservation, Stewart’s ‘Best Practice EVA’ is the most revolutionary, cogent, logical, practical, and useful tome on investing, accounting, and finance I have had the good fortune to read.Robin P. Hood

the explanation about eva is good and the autor makes a lot of examples using his own experience, if you want to know how to set strategies using eva it is the perfect one

In the second half of the 1980’s shareholders were waking up to the enormous waste inflicted by managements who instead of acting as trustees for the owners milked the companies for perks, money and social benefits. This pawed the way for the corporate raiders of the day, but also - inspired by the trailblazer Alfred Rappaport – a more intellectual movement took root. In the center of this shareholder value movement was G. Bennett Stewart III and the consultancy Stern Stewart & Co with their concept Economic Value Added, or EVA for short.I was an early devotee simply because the concept made sense as it relates to the notion of capital allocation as the method of economic progress and offered a theoretically sound framework for valuing stocks but also provided a link between finance and corporate strategy.Then the shareholder value flames began to flicker and died out. Partly, this was due to the concept being hijacked by greedy managers who perversely used it to shower themselves in option riches and when the TMT-boom went into bust, shareholder value – guilty by association – was thrown out with the bathwater. However, it was also partly due to a lack of usability of many of the concepts such as EVA. The movement hibernated through concepts such as CROCI championed by Deutsche Bank and HOLT offered by Credit Suisse and now Stewart tries to relight the EVA flames with this impressive book.At the center of the effort are a number of new financial EVA-based ratios. At its most basic, EVA is a measure of economic profit where not only operating costs and taxes have been deducted from sales but also the capital cost for using both debt and equity financing. In a world that uses ratios such as sales growth, ROI, profit margins or PE-ratios to compare business units or developments over time, to gauge the relative attractiveness of stocks etc. a monetary profit measure did not inspire much. Stewart now brings forward a number of ratios with the EVA-margin (EVA/Sales) and EVA-momentum ( EVA/Prior Sales) as the most prominent ones. Out of these the author constructs a full Du-Pont-type of schedule to analyze companies.Stewart uses a lot of energy on convincing the reader of the superiority of the new EVA-based measures compared to more traditional accounting measures, financial ratios and valuation multiples. On a theoretical level he succeeds – I’m enthusiastic about testing the concepts for corporate analysis and investment decisions. I also love how the concept of EVA-margin facilitates comparisons of capital light and capital heavy companies.But EVA still suffers from a complexity issue when the IFRS accounting is turned into economically rational EVA-figures. If EVA is to fly, an author must be overly explicit with regards to all the adjustments. Yet, when reading the book I find myself wishing for an excel file with all the calculations to be able to get a better overview of the full result. All the ratios and adjustments get a bit overwhelming as it is now. As Stern Stewart & Co has been split into Joel Stern’s Stern Value Management and Stewart’s EVA Dimensions and the author is actively marketing and selling his full service offer to corporate customers this level of transparency is not available. The last chapter of the book is also something of a sales pitch. Further I think the handling of financials could have warranted some comment. All this deducts a star in my rating of an otherwise important book.Few concepts bring such clarity to so many areas in business and finance as EVA. It doesn’t matter if your specialty is capital budgeting, corporate strategy, Mergers & Acquisitions, performance evaluation or incentive systems of security analysis; EVA and this book in particular will benefit you greatly.This is a review by investingbythebooks.com

Esse livro apresenta o EVA (economic value added) pelo próprio autor da metodologia: Bennett Stewart. É o segundo livro do autor. O primeiro, The Quest for Value, parecia mais um tratado teórico e denso sobre o assunto. Nessa obra, Stewart traz uma linguagem mais simples e direta, com vários exemplos da metodologia. Talvez para desvincular da imagem do primeiro livro, ele adotou o nome de "melhores práticas".Para quem não tem familiaridade com o assunto, o EVA, pronunciado E-V-A, é uma métrica para avaliar o lucro gerado por uma empresa/unidade/ativo tendo como base os princípios econômicos ao invés dos contábeis. Uma vez entendida a metodologia, ela facilita a gestão de um ativo uma vez que funde em um único indicador a receita, custo e investimento. Eu, particularmente, sou adepto da metodologia tanto pela sua robustez quanto pela sua facilidade de uso.Em resumo, o EVA é calculado pela equação:EVA = Receita de Vendas - Custos Operacionais - Custo de CapitalUma das principais vantagens do EVA sobre outros indicadores, tais como EBITDA, é que ele leva em consideração o custo de capital, assim estabelecendo uma cobrança pela utilização de um ativo. O EVA é matematicamente igual ao VPL, mas sua utilização facilitar ao gestor enxergar melhor o que está - e o que não está - contribuindo para gerar valor para a empresa.

Un gran libro, valió cada peso invertido. La visión de las finanzas mediante el EVA es muy superior a la de las finanzas tradicionales. El libro llego en menos tiempo del programado.Gracias a Amazon México porque conseguir este libro en México seria simplemente imposible.

Melhores práticas de mensuração de valor corporativo! Simplesmente excelente!