An example of calculating economic value added. Economic Value Added, EVA. Stages of implementing an EVA governance model in the enterprise

Economic value added (EVA) is the real economic profit attributable to shareholders after deducting all operating expenses (including taxes) and finance costs. Since EVA is official trademark Stern Stewart Management Services of New York City, a very often used term is Economic Profit (EP).

EVA = (Return on Equity - Cost of Equity) x (Investment Capital).

For example, a firm's return is 10% on $ 1 million and the cost of capital is 11%, then:

EVA = (10% -11%) * 1,000,000 = - $ 10,000

This example shows the importance of EVA. 10% return may sound “optimistic”, but this is less than the company's cost of capital, and EVA objectively shows that value added in this example negative.

EVA vs other economic indicators.

In fact, EVA is not new idea, this concept is very closely related to the concept of "residual value", first introduced by Alfred Marshall in 1980. It is also close to the concepts of "discounted stream Money"(DCF) and" net present value "(NPV).

As follows from the above example, this indicator (EVA) is better than "income" or return on assets (ROA), because these two measures do not take into account the cost of capital.

Difficulties and disadvantages.

The definition of EVA is based on the cost of capital, its return and investment, and it is assumed that you can measure them. In practice, however, there are certain difficulties. For example, if you measure investment capital based on book value, you would underestimate the true value of assets.

Almost all accounting indicators have certain drawbacks, often to a greater extent than is acceptable for an objective assessment, and the use of EVA leads to the same difficulties. The reliability of this metric is degraded if you try to use it for each business unit. you run into the inevitable problem of overhead posting. Calculating EVA will require significant effort on the part of your accounting department.

Moreover, EVA is an indicator that refers to the past. If you make an investment that does not pay off over a number of years, the EVA will be negative until the investment is profitable. Like profit, EVA is a short-term indicator, not focused on a long-term strategy.

EVA ignores the value of real options (or, more often, incorrectly evaluates them at 0).

EVA and HR management.

EVA is often positioned as the best indicator for calculating bonuses. It has a number of advantages for use over such an indicator as "income", since includes the cost of capital.

In addition, traditionally, executives want to maximize investment in their divisions, and if their remuneration will depend on EVA, they will want additional investments only if the EVA is positive.

Is EVA really that good?

It's hard to understand the excitement that has existed around EVA over the past decade. EVA was positioned as The best way bringing together the interests of employees and business owners. In fact, this is not so true. We prefer the more correct approach developed by Kaplan and Norton. In any case, any social scientist knows that "bonuses" are just one small part of effective behavior management.

As noted earlier, EVA, like all other metrics, has a certain set of limitations and disadvantages that make it far from perfect.

EVA is the same tool as FIFO or LIFO - however, there is no excessive hype around these methods. However, no one denies its usefulness in business and personnel management, but it is important to understand all its limitations and not idealize it.

Translation: Eputaev Yan

Economic added value(Economic Value Added, EVA) - an analytical indicator that represents the company's profit from current activities net of taxes, reduced by the amount of the payment for all capital invested in the company. It is used to assess the effectiveness of a company from the perspective of its owners.

EVA = profit from current activities - taxes - capital invested in the company (that is, the amount of the balance sheet liability) * (WACC) or:

EVA = (P - T) - IC * WACC = NP - IC * WACC = (NP / IC - WACC) * IC, where

P - profit from current activities;
T - taxes;
IC - capital invested in the company;
WACC is the weighted average price of capital;
NP is net profit.

Economic value added is an investment perspective on a business, as opposed to an analysis-based approach accounting statements companies.

Many large consulting companies offer their analysis systems based on economic value. For example, there are EVA models from KPMG, PWC, Accenture, ATKearney. In turn, Stern, Stewart & So publishes ratings in which companies are ranked according to the standardized indicator “Stern & Stewart Performance 1000”.

In all models of economic value, it is argued that to create (add) value in t-th year one of the conditions must be met.

1. The operating post-tax profit of the company must exceed its own and borrowed capital, and the company's net profit is a fee on equity.
2. The return on capital invested in the company must exceed the cost of capital: ROCE> WACC.

The difference (ROCE - WACC) is called efficiency spread and is a key indicator of the ranking of companies.

The positive value of economic profit (EVA) characterizes the efficient use of capital. A negative EVA indicates inefficient use of capital.

An EVA value of zero characterizes the acceptability of maintaining such a business on the market, since investors receive a return that compensated them for the investment risk.

The EVA concept is a more perfect tool for measuring efficiency than net profit, since it evaluates not only the final result of the company's activities, but also the price at which it was obtained.

One of the downsides to EVA is the emphasis on profit and ignorance. cash flows... In this connection, some financial advisers promote as key indicator CFROI (Cash Flow Return on Investments).

Based on the book Teplova T.V. "Corporate finance"

Elena Larionova
consultant for financial analysis and planning CG "Voronov and Maksimov", lecturer at the Faculty of Economics, St. Petersburg State University
http://www.vmgroup.ru/

V last years in foreign publications, more and more attention is paid to approaches to assessing the effectiveness of the enterprise. Among such approaches is an approach based on building Balanced Score Cards (BSC) and determining the effectiveness of a business based on an analysis of its various aspects reflected in balanced cards, another approach is determining how profitable a business is from the perspective of the owners of the enterprise. The problem of determining profitability is solved by calculating the indicator of economic value added. This indicator in foreign literature is denoted EVA (economic value added)... In the domestic literature, it has so far been little described. It is precisely because of its importance for assessing the efficiency of an enterprise's activities that this article will focus on it.

Economic value added ( EVA) represents the profit of the enterprise from ordinary activities, net of taxes, reduced by the amount of payment for all capital invested in the enterprise.

The indicator is used to assess the efficiency of the enterprise from the position of its owners, who believe that the enterprise has a positive result for them if the enterprise has managed to earn more than the profitability of alternative investments. This explains the fact that when calculating EVA, not only the fee for the use of borrowed funds, but also the equity capital is deducted from the amount of profit. It can be argued that this approach is more economic than accounting.

In practice, EVA is calculated as follows:

EVA = profit from ordinary activities - taxes and other mandatory payments - capital invested in the company, i.e. balance sheet liability) * weighted average cost of capital (1)

Developing formula (1), it is possible to show the calculation of the EVA indicator as follows:

EVA = (P - T) - IC * WACC = NP - IC * WACC = (NP / IC - WACC) * IC, (2)

where:
P- profit from ordinary activities;
T- taxes and other obligatory payments;
IC- capital invested in the enterprise;
WACC- weighted average price of capital;
NP- net profit.

EVA = (NP / IC - WACC) * IC = (ROI - WACC) * IC, (3)

where:
ROI- the return on capital invested in the company.

From formula (3) it follows that an important role in calculating the EVA indicator is played by the structure of sources financial resources enterprises and the price of sources. EVA allows you to answer the question of the company's investors: what type of financing (own or borrowed) and what amount of capital is required to obtain a certain value of profit. On the other hand, EVA determines the line of behavior of the owners of the enterprise, directing the capital of investors to the enterprise, or vice versa, facilitating their outflow to enterprises that allow for higher rates of profitability.

In formulas 1-3, to determine the EVA indicator, you need to know the weighted average price of capital WACC. The weighted average capital price can be calculated using the following formula:

WACC = PZK * dZK + PSC * dSK, (4)

where:
PZK- the price of the borrowed capital;
dZK- the share of borrowed capital in the capital structure;
PSC- price equity capital;
dSC- the share of equity in the capital structure.

Essence EVA manifests itself in the fact that this indicator reflects the addition of value to the market value of the enterprise and the assessment of the efficiency of the enterprise through determining how this enterprise is valued by the market.

Market value of the enterprise = net assets (at book value) + EVA of future periods, adjusted to the present moment (5)

In accordance with formula (5), the market value of the enterprise may exceed or be less than the book value of net assets, depending on the future profits of the enterprise. The EVA value determines the behavior of the owners of the enterprise in relation to investing in the given enterprise.

Consider the following three options for the relationship between the EVA value and the behavior of the owners:

1. EVA = 0, i.e. WACC = ROI and the market value of the enterprise is equal to the book value of net assets. In this case, the owner's market gain when investing in a given enterprise is equal to zero, so he wins equally by continuing operations in this enterprise or investing in bank deposits.
2. EVA> 0 means an increase in the market value of the company over the book value of net assets, which stimulates the owners to further invest in the company.
3. EVA<0 leads to a decrease in the market value of the enterprise. In this case, the owners lose the capital invested in the enterprise due to the loss of alternative profitability.

From the relationship between the market value of the company and the values ​​of EVA, it follows that the company must plan future values ​​of EVA to guide the actions of the owners to invest their funds.
The expectation of future EVA values ​​has a significant impact on the growth of the company's share price. If expectations are conflicting, the stock price will fluctuate, and in the short term it will not be possible to draw a clear relationship between the EVA values ​​and the company's stock price. Therefore, the task of planning profit, and with it planning the structure and price of capital, is the primary task of enterprise management. The more professional the management of the enterprise is, the higher the EVA value and the planning accuracy, all other things being equal. This explains the fact that in large Western enterprises, EVA values ​​are the basis of premiums for managers who become more interested in the growth of enterprise profitability and the growth of EVA. In this regard, EVA acts as the basis of motivation.
The EVA concept is often used by Western companies as a better tool for measuring the performance of divisions than net profit. This choice is explained by the fact that EVA assesses not only the final result, but also at what price it was obtained (i.e. how much capital and at what price was used).

Returning to formula (1), we can outline the ways to increase the EVA indicator:

1. Increase in profits when using the same amount of capital;
2. Reducing the amount of capital used while maintaining profits at the same level;
3. Reducing the cost of raising capital.

Separately, we can highlight the reduction in the amount of taxes and other mandatory payments within the framework of tax planning, using various schemes allowed by the legislation of the Russian Federation.
The indicated ways of increasing EVA are implemented in specific activities carried out by enterprises. If the EVA indicator is chosen by the company as a criterion for assessing the effectiveness of its activities, then the task is to increase the value of this criterion. Such an increase occurs both within the framework of the reorganization of the enterprise (see table 1), and within the framework of current management activities.

Table 1: Activities aimed at improving the efficiency of the enterprise

In general, to summarize, we can outline the role that the economic value added indicator plays in assessing the efficiency of an enterprise:

• EVA acts as a tool that allows you to measure the actual profitability of an enterprise, as well as manage it from the perspective of its owners;
• EVA is also a tool for showing business leaders. how they can affect profitability;
• ЕVA reflects an alternative approach to the concept of profitability (transition from calculating return on investment (ROI), measured in percentage terms, to calculating economic value added (EVA), measured in monetary terms);
• EVA acts as a tool for motivating enterprise managers;
• EVA increases profitability primarily by improving the use of capital, rather than by focusing on lowering the cost of using capital.

Thus, it can be assumed that the use of the EVA indicator in management accounting will improve the quality of assessing the performance of Russian enterprises.

FGOU VPO Financial Academy under the Government of the Russian Federation (FINACADEMY)

Department "Appraisal and property management"

Abstract on the topic:

"Economic added value

( EVA )»

Performed : student of group FM 4-2

Kalabashkina E.

Scientific adviser: Tulina Yu.S.

Moscow

Introduction

In the 1970s and 1980s, companies in developed countries faced the question of developing a new financial management mechanism. This was due to the fact that the methods of assessing the performance of a company that existed before that time could no longer meet the growing requirements of managers, since they did not allow assessing the company's performance in the long term. In addition, investors began to demand from the management of companies to constantly increase the value of the company - an indicator that reflects the level of well-being of shareholders.

The concept of economic value added (EVA ™), developed in the United States in the 80s of the last century, solved these problems. Based on the principle of economic profit, the EVA indicator could be used to determine the value, as well as to characterize the long-term activities of the company.

This concept was quickly applied by leading American companies such as Coca-Cola, General Electric. Soon, firms (including small ones) in other countries began to adopt their experience.

Russia currently has the opportunity to borrow the most progressive foreign technologies and methods of doing business, which always gives the "catching up" country an advantage over the "overtaking" one. In this regard, it is important for domestic companies to immediately implement and use advanced management mechanisms. The use of the concept of economic value added, which is one of the advanced concepts of financial management, will allow domestic firms to improve their efficiency and reduce the gap with foreign competitors.

Despite the positive experience of use abroad, at present the concept of economic added value is little used by Russian companies. The main reason for this is the complexity of its application "in its pure form" in the Russian economy. Accordingly, identifying the possibility and developing mechanisms for using the concept of economic value added in the financial management of Russian companies is an urgent task of financial science.

The object of this study advocates the process of financial management of the company.

Subject of study- mechanisms of financial management of the company based on the concept of economic added value.

Theoretical and methodological basis of the research comprised works, first of all, of foreign specialists in the field of corporate finance, valuation, company value management and, in fact, the EVA concept.

Among the classic works of the theory of finance, one should highlight the works of F. Modigliani, M. Miller, E. Fam and W. Sharp, S. Ross, S. Pratt.

Among the works devoted to the concept of EVA, first of all, it should be noted the work of its author B. Stewart "The Quest For Value: a Guide for Senior Managers", as well as the book by D. Young and S. O'Byrne "EVA and Value-Based Management: a Practical Guide to Implementation ". Among the empirical works that consider the results of the implementation of EVA in practice, it is worth highlighting the works of S. Weaver, G. Biddle and R. Bowen.

In the 70s-90s, two concepts for assessing the cost and efficiency of enterprises appeared, among which the most popular in recent years are balanced scorecard(BSC) and economic value added(EVA).

Development of the paradigm for determining the value and efficiency of the firm

2. Economic value added (EVA): essence, calculation formula, value.

In the Russian-language economic literature, the concept of EVA is considered only in separate works, almost exclusively in translations. EVA is an important financial indicator - relatively recently (in the early 90s of the last century) it began to be actively used by many corporations in the USA and some other countries (for example, let's call AT&T, QuarkerOats, Briggs & Stratton, Coca-Cola).

Economic value added ( EVA) represents the profit of the enterprise from ordinary activities, net of taxes, reduced by the amount of payment for all capital invested in the enterprise.

The indicator is used to assess the efficiency of the enterprise from the position of its owners, who believe that the enterprise has a positive result for them if the enterprise has managed to earn more than the profitability of alternative investments. This explains the fact that when calculating EVA, not only the fee for the use of borrowed funds, but also the equity capital is deducted from the amount of profit. It can be argued that this approach is more economic than accounting.

The author of the concept of “economic added value” D.B. Stewart defined this figure as the difference between net operating income and capital costs, i.e. E VA allows you to estimate the real economic profit at the required minimum rate of return.

Economic value added is an indicator of the annual profitability of an enterprise, which primarily shows shareholders whether the enterprise has managed to create additional value. EVA can also serve as a target for senior management and be used in a motivation system.

Indicator logic EVA is as follows: net operating income after tax is income after deducting expenses and depreciation. Part of this income goes to pay for the cost of using resources (expressed in the cost of equity and borrowed capital), and the other part is the created value, which is measured E V A. This concept is based on the fact that it is not enough for a company to have a positive financial result or an acceptable level of earnings per share; any business unit in the course of its economic life must reach such a level of development at which new value can be created. And it is created only when the company receives such a return on invested capital, which exceeds the cost of raising capital.

Economic value added is calculated using the formula:

EVA ( Economic Value Added ) - economic value added.

NOPAT ( Net Operating Profit After Tax ) - net profit received after payment of income tax and less the amount of interest paid for the use of borrowed capital. That is, this is the net profit according to the financial statements (according to the Profit and Loss Statement), taking into account the necessary adjustments.

Capital ( Cost Of Capital ) - the total cost of the company's capital (consists of equity and debt capital, measured in absolute units).

WACC ( Weight Average Cost Of Capital ) - the weighted average cost of capital (measured in relative terms - in%), this is the cost of total capital (equity and debt).

CE ( Capital Employed ) - invested capital. Represents capital, determined taking into account the cost of resources not included in the balance sheet. It is calculated by correcting the data in the financial statements.

Invested capital cost ( CE ) is calculated by the formula:

CE = TA – NP , where

TA ( Total Assets ) - total assets (according to the balance sheet),

NP ( Non Percent Liabilities ) - interest-free current liabilities (on the balance sheet), that is, payables to suppliers, the budget, advances received, and other payables.

Weighted average cost of capital ( WACC ) is calculated by the formula:

WACC = Ks * Ws + Kd * Wd * (1 - T), where

Ks- cost of equity (%),

Ws- the share of equity capital (in%) - according to the balance sheet,

Kd- cost of borrowed capital (%),

Wd- the share of borrowed capital (in%) - according to the balance sheet,

T- income tax rate (in%)

Equity cost ( Ks ) is calculated by the method CAPM :

Ks = R + b * (Rm - R) + x + y + f, where

R- risk-free rate of return (for example, rate on deposits) (%),

Rm- the average return on shares on the stock market (%),

b- coefficient "beta", which measures the level of risk,

x- premium for risks associated with insufficient solvency (%),

y- premium for the risks of a closed company associated with the unavailability of information about the financial condition and management decisions (%),

f- country risk premium (%).

The cost of borrowed capital ( Kd ) is calculated by the formula:

Kd = r * (1 - T ), where

r- the annual interest rate for the use of borrowed capital,

T- income tax rate.

From the formula for economic value added, you can derive the relative indicator "Return on invested capital" ( Return on Capital Employed , ROCE ). The economic meaning of this indicator is that economic value added (EVA) arises in a company if, over a given period of time, it was possible to earn a return on invested capital (ROCE) higher than the investor's rate of return (WACC).

Investors (owners, shareholders) will not consider themselves satisfied if the return on their capital earned in the company has not reached the threshold rate of return set by them.

This principle of formation of the company's value is expressed in the indicator of economic value added (EVA):

Spread- yield spread (difference) between the return on invested capital and the weighted average cost of capital. The spread is the economic value added in relative terms (in%).

Spread = ROCE – WACC

If Spread is positive, then the company has earned a return in excess of the return required by the investors. In this case, the return on capital invested in the company is higher than the alternative return for the investor, because all alternatives are assessed and accounted for in the indicator of the weighted average cost of capital (WACC). Consequently, the end result - the emergence of economic value added means an increase in the cost of capital for a given period.

ROCE (Return on Capital Employed)- Return on invested capital:

ROCE = NOPAT / CE

The essence EVA manifests itself in the fact that this indicator reflects the addition of value to the market value of the enterprise and the assessment of the efficiency of the enterprise through determining how this enterprise is valued by the market.

Market value of the enterprise = net assets (at book value) + EVA future periods, given to the present

The EVA value determines the behavior of the owners of the enterprise in relation to investing in this enterprise:

1. EVA = 0 , i.e. WACC = ROI and the market value of the enterprise is equal to the book value of net assets. In this case, the owner's market gain when investing in a given enterprise is equal to zero, so he wins equally by continuing operations in this enterprise or investing in bank deposits.

2. EVA >0 means an increase in the market value of the company over the book value of net assets, which stimulates the owners to further invest in the company.

3. EVA <0 leads to a decrease in the market value of the enterprise. In this case, the owners lose the capital invested in the enterprise due to the loss of alternative profitability.

From the relationship between the market value of the company and the values ​​of EVA, it follows that the company must plan future values ​​of EVA to guide the actions of the owners to invest their funds.

The expectation of future EVA values ​​has a significant impact on the growth of the company's share price. If expectations are conflicting, the stock price will fluctuate, and in the short term it will not be possible to draw a clear relationship between the EVA values ​​and the company's stock price. Therefore, the task of planning profit, and with it planning the structure and price of capital, is the primary task of enterprise management.

The EVA concept is often used by Western companies as a better tool for measuring the performance of divisions than net profit. This choice is explained by the fact that EVA assesses not only the final result, but also at what price it was obtained (i.e. how much capital and at what price was used).

3. Ways to increase the EVA indicator:

1. Increase in profits when using the same amount of capital;

2. Reducing the amount of capital used while maintaining profits at the same level;

3. Reducing the cost of raising capital.

Separately, we can highlight the reduction in the amount of taxes and other mandatory payments within the framework of tax planning, using various schemes allowed by the legislation of the Russian Federation.

The indicated ways of increasing EVA are implemented in specific activities carried out by enterprises. If the EVA indicator is chosen by the company as a criterion for assessing the effectiveness of its activities, then the task is to increase the value of this criterion. Such an increase occurs both within the framework of the reorganization of the enterprise and within the framework of current management activities.

Activities aimed at improving the efficiency of the enterprise

In general, to summarize, we can outline the role that the economic value added indicator plays in assessing the efficiency of an enterprise:

· EVA acts as a tool that allows you to measure the actual profitability of an enterprise, as well as manage it from the position of its owners;

· EVA is also a tool for showing business leaders. how they can affect profitability;

· ЕVA reflects an alternative approach to the concept of profitability (transition from calculating the return on investment (ROI), measured in percentage terms, to calculating economic value added (EVA), measured in monetary terms);

· EVA acts as a tool for motivating enterprise managers;

· EVA increases profitability primarily by improving the use of capital, rather than focusing on lowering the cost of using capital.

Thus, it can be assumed that the use of the EVA indicator in management accounting will improve the quality of assessing the performance of Russian enterprises.

The indicator of added economic profit can be increased by:

1.increasing the return on existing capital, which can be achieved by increasing prices or margins, increasing volumes or reducing costs;

2. an increase in profitability, which can be achieved by investing capital in projects with growing profits and adequate expenditure of additional capital, while investments in working capital and production capacity may be required in order to increase sales, promote new products or enter new markets;

3. optimization of investments, which can be achieved by rationalizing, eliminating or reducing investments in operations that cannot provide a return on the cost of capital;

4. Optimization of the cost of capital, which can be achieved by reducing capital expenditures, while maintaining the financial flexibility required to implement strategies for using debt, management risk and other financial instruments.

Thus, it is possible to increase the added economic profit in three ways - to increase profit using the same amount of capital; reduce the amount of capital used, while maintaining profit at the same level; and reduce the cost of raising capital.

The concept of management of the company's value based on the method of economic value added as the main criterion for assessing the company's activities, it is proposed to use the indicator of economic value added (EVA).

The goal of value management is to maximize the company's value through continuous growth in economic value added (EVA). And the way to manage value is to manage the factors that influence the value of the company.

A huge variety of factors influence the company's performance. They can be classified as factors of the external and internal environment (that is, macro- and microeconomic factors). The former influence the results of the company's activity from the outside, the latter from the inside.

Internal factors affecting the cost can be:

Growth rate of sales of products / services of the company

Growth rates of the main items of the Balance Sheet and the Profit and Loss Statement

Net profit growth rates

The rate of return of the owner (shareholder, investor)

Other factors

External factors affecting the cost can be:

The level of investment, marketing, financial, production and organizational risks of the company

· Change in the cost of borrowed capital (interest rates on loans)

· Change in tax rates

Economic value added is an important economic indicator that characterizes the efficiency of using the enterprise's capital, adding to the market value of the enterprise. Economic value added is the real economic income calculated from the difference between the profit earned and the profit required by the owner, determined using the cash basis of income and expenses.

Economic value added, economic profit and other indicators of residual profit have clear advantages over accounting profit as a criterion for assessing performance.

EVA serves as a constant reminder for managers: Invest if, and only if, the return on investment is sufficient to recover capital costs. For managers accustomed to focusing on accounting profit or profit growth, it is relatively easy to pick up on this “signal”. The EVA criterion can support incentive and reward systems suitable for all levels of the organization, down to the lowest. For senior management, such systems can replace close monitoring. With EVA-based reward systems, management will no longer have to urge downline managers not to waste capital and then check to see if they are following the directive. The use of EVA implies the delegation of authority and responsibility.

EVA provides managers with a visual representation of capital spending. An enterprise manager can improve EVA in two ways:

1) increasing profits;

2) by reducing the capital involved.

As a result, the manager has an incentive to get rid of underutilized assets or transfer them to other hands. Working capital may also decrease.

The indicator of economic value added has several disadvantages: this indicator does not reflect the forecast of future cash flows and, therefore, the present value. On the contrary, EVA is determined only by the profit of the current year. Accordingly, it encourages managers to pursue projects with quick payback and discourages projects that start to pay off later. Similar problems are associated with the launch of a new venture, when huge investments are required, and the profit in the early years is low or even negative. Moreover, this is not equivalent to negative net present value, since later profit and cash flow will increase significantly. But at the initial stage, the economic added value will be negative, even if, by all parameters, the project is predicted to have a high positive net present value.

Among the disadvantages of the concept are the following:

· EVA indicator does not take into account differences in the sizes of the companies under study;

· EVA calculation is based on accounting indicators;

· EVA indicator does not reflect the reasons for possible problems in the company's activities.

The ability to calculate EVA not only when evaluating an investment project, but also as an indicator of a company's performance for any period is its significant advantage over traditional indicators such as income or profitability. This advantage is due to the fact that the EVA concept is based on an integrated approach to three main areas of management:

· Drawing up a capital budget;

· Evaluation of the performance of departments or the company as a whole;

· Development of an optimal fair management bonus system.

The advantages of applying the concept in the first two areas are associated with an adequate and easy-to-use determination of the degree to which a division, a firm or a separate project has achieved the goal of increasing market value.

Unfortunately, most companies use traditional performance indicators, namely: profit and marginal profit, sales volumes, income, etc., which can show a distorted picture of the company's state from the standpoint of its "health" in the long run.

Conclusion

Regardless of the size of the company, the continuous creation of value for investors is the main goal of all commercial organizations, therefore, an objective assessment of the effectiveness of the investment is equally important.

Today EVA is the most accurate way to measure a company's performance. It is even more accurate than traditional profit margins because it includes the present value of capital.

In most cases, the use of EVA is the first step towards the implementation of a system of continuous improvement and the subsequent use of modern management tools.

Bibliography

1. Osipov M.A. Using the concept of economic added value to improve efficiency and measure the company's activities // History of management thought and business. VI International Conference "Problems of Measurement in Organization Management". Moscow, June 23-25, 2007 / Ed. IN AND. Marsheva, I.P. Ponomarev. - M .: MAKS Press, 2007 .-- S. 98-103.

2. Osipov M.A. Modern mechanisms of enterprise management and measurement of its activities // Finance: Collection of articles. - Moscow: Sputnik + Company, 2008. - P. 95-126.

3.http: //www.cfin.ru/management/controlling/evalution.shtmlEV Balanced Scorecard Illusion Konstantin Redchenko, Ph.D., Associate Professor of Lviv Commercial Academy

4.http: //1fin.ru/?id=185

L.I. Schneider Kuban State University

5. Damodaran A. Investment appraisal. Tools and techniques for evaluating any assets / A. Damodaran: Per. from English M .: Alpina Business Books, 2005.

6. Teplova T.V. Investment leverage to maximize the value of the company. Practice of Russian enterprises. M: Vershina, 2007.

7. Copeland T., Murrin J. Company value: assessment and management. M .: Olymp-business. 1999.

8. D. Young, S. O'Byrne. EVA and Value Based Management. A Practical Guide to Implementation - McGraw-Hill - 2000, Chapter 1, 2, 6, 9

EVA ™ is a registered trademark of the consulting company SternStewart & Co. Further EVA.

Stewart B. The Quest For Value: a Guide for Senior Managers. - New York: HarperCollins Publishers, 1991.

Http://www.cfin.ru/management/controlling/evalution.shtml

EVAlution balanced scorecard Konstantin Redchenko, Ph.D., Associate Professor of Lviv Commercial Academy

Http://www.finanalis.ru/litra/324/2293.html Economic added value Elena Larionova financial analysis and planning consultant, Voronov and Maksimov CG, lecturer at the Faculty of Economics, St. Petersburg State University http :// www . vmgroup . ru /

Http://1fin.ru/?id=185L.I. Schneider Kuban State University

Economic value added (EVA) model

The method has become popular since the 1980s. Invented by B. Stewart and D. Stern and patented by Stern Stuart & Co.

Economic value added reflects the amount of net profit that can be divided among shareholders after taxes and capital raising costs. The most important advantage of a company valuation based on EVA - combination in this indicator of the results of financial and operating activities.

Original formula EVA as follows:

where IORAT - operating profit after taxes (EB1T o (1-0);

1ULSS - weighted average cost of capital; 1C - invested capital.

Invested capital in methodology EVA is the capital invested in assets to support the operational activities of the company. This amount is calculated as the difference between the carrying amount of total assets (at the beginning of the period) and the amount of non-interest bearing short-term liabilities, or as the sum of equity and long-term liabilities.

This is the so-called operational approach to calculation EVA.

There is also financial (economic) approach. Payment EVA is carried out according to the formula of the operational approach by dividing profit NOPAT on the WACC. As a result, an indicator of return on invested capital appears ROIC:

Work WACC o 1C also called capital costs.

However absolute measurement EVA not enough to compare companies. Therefore, the relative EVA. Insofar as EVA is an indicator that evaluates the effectiveness of investments, compare EVA necessary in relation to the amount of invested capital (C /). Thus, we obtain an expression for the standardized EVA:

Dividing both parts in the formula EVA on / C, we get the following expression:

Thus, the main idea of ​​the method EVA is this: the company has value to the owner only if EVA> Oh, i.e. if the return on invested capital exceeds the cost of capital:

The value of the spread is the basis for measuring the risk-adjusted return on equity. Using this indicator, you can compare companies that differ in: categories (small / medium); capital-to-labor ratio; capital structure; degree of risk.

It should be noted that the indicator EVA for one period in itself is not very informative. Therefore, it is necessary to consider it in time. For this, the indicator of the present value added is used, i.e. the company value is considered the sum of the discounted value added for all forecast periods.

EVA is an indicator that is based on an attempt to overcome traditional problems accounting... Nevertheless, since the data for the calculation are taken from the financial statements, data conversion problems can still arise in this method.

In order for the EM4 indicator to measure precisely the net economic profit for the owners of the company, it is impossible to replace the operating profit after taxes. NOPAT the result of production activities on the balance sheet, and the invested capital is the sum of assets from the balance sheet. This leads to the fact that the indicator EVA disadvantages inherent in classical profitability indicators appear. Therefore, it is recommended to use the indicator EVA translate accounting data into economic indicators.

For this purpose, the authors of the EO model D. Stern and B. Stewart have identified a list of amendments to accounting data, which includes up to 154 articles, but of which only 10-12 are proposed to be used in practice. Full list amendments are a commercial secret of the authors.

EVA - This is one of the most popular and frequently used options in the theory of value added assessment. Other variations are Market Value Added (MBA), Shareholders Value Added (SVA), and Total Value Added (TVA).