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Conclusion (Cont.)
- Since EVA helps the organization to realize that capital is a costly resource the most immediate effect
of EVA implementation is in most cases dramatic improvement in capital efficiency (improved capital turnover)
- Compared to conventional measures, EVA is an epochal measure since it can be maximized: it is the better
the bigger EVA is. With traditional measures that is not the case, since ROI can be increased with ignoring below
average projects and EPS/Operating Profit/Net profit can be increased simply investing more money in the company
- EVA helps enormously the management and employees to see what should be real objective of the company, since
it makes clear to all what profitability really is
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