Contents
SHORTCOMINGS WITH FIRST-GENERATION EVA
INTRODUCING THE NEW BEST-PRACTICE EVA MODEL
GETTING FROM EVA TO THE SHARE PRICE
THE TIE BETWEEN EVA AND SHAREHOLDER RETURNS
Chapter 3: Accounting for Value
MIXING OPERATING AND FINANCING DECISIONS
CAPITAL GAINS AND LOSSES GO TO THE CAPITAL ACCOUNT
RESTRUCTURING COSTS ARE INVESTMENTS, TOO
R&D AND BRAND SPEND ARE INVESTMENTS
FIX RETIREMENT COST DISTORTIONS
SIMPLE MEASURES MAKE FOR COMPLEX CONVERSATIONS
Chapter 4: What’s Wrong with RONA?
Chapter 5: The New EVA Ratio Metrics
LET’S GET REAL—A FIRST LOOK AT AMAZON
PROPERTY, PLANT, AND EQUIPMENT (PPE)
AMAZON UNDER THE EVA MARGIN MICROSCOPE
EVA AND MVA AT TIFFANY AND BLUE NILE
Chapter 7: Setting EVA Targets
Chapter 8: Put Momentum into Planning
EVA MOMENTUM IS A PERFECT PROXY FOR THE QUALITY AND VALUE OF FORWARD PLANS
Chapter 9: Dividing Multiples into Good and Bad
Chapter 10: Put EVA into Capital Decisions and Acquisitions
EPS DOESN’T COUNT; IT IS OFFSET BY P/E
Chapter 11: EVA and the Buy Side
Chapter 12: Become a Best-Practice EVA Company
Appendix A: The Best-Practice EVA Software Toolkit
Appendix B: Corrective Accounting Adjustments
EVA PENETRATES ACCOUNTING DISTORTIONS TO REVEAL ECONOMIC TRUTH
Appendix C: Accounting for Corporate Charges in Detail
EVA BEFORE GOODWILL AND UNUSUAL ITEMS