EVA Articles

Is Your Finance Fuzzy or Focused

Bennett Stewart | 2011-10-21

Most companies use bloated finance—cash flow for capital budgeting and valuations, ROI and the like for judging performance, bonuses hitched to budgets for EBITDA and margins, and top line board measures like EPS and ROE.  It is complex, ambiguous, and rife with contradictions.  It stifles initiative and teamwork and real strategic thinking.  It saps vitality and is a drag on creating value. It’s the status quo and is in dire need of repair.  Here’s how.

What’s Wrong with RONA, and What’s Better

Bennett Stewart | 2011-10-21

After EPS, the most popular corporate yardstick is ROI, and while a great improvement, ROI suffers its own set of shortcomings.  In fact, as our CEO explains, ROI-focused firms have made some of the biggest blunders in business history.  And besides, with the new EVA ratio metrics, there is no longer any excuse for using ROI.  Stewart makes a persuasive case it is time to retire ROI and shows what’s better.

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