EVA Dimensions

On-going Performance Management

To manage and maximize value

• Calculate MVA and excess returns, and EVA, ROC, EVA Margin, EVA Momentum, stock price and EVA Risk metrics for past quarter, trailing 4Qs across a user defined hierachy
• Compare prior periods in “Reports,” versus peers in “Benchmark Reports,” and versus different financial plans in the “Compare” module
• Diagnose and document key drivers of performance, and to develop an integrated, “value anchored” scorecard and executive dashboards
• Analyze EPS-to-EVA gap; highlight key adjustments, assess “quality of reported earnings, red-flag accounting risks
• Use above to help identify emerging trends, risks, gaps, opportunities, including share buy back, investor communication strategies

Target Setting

Set challenging but realistic goals that meet owner expectations

• Review 3-5 year trailing EVA Margin, EVA Momentum for Company, divisions and peers
• Analyze the market-implied EVA Momentum for Company and peers
• Establish aggregate EVA Momentum, EVA goals for budget, 3-5 year plan

Planning

Engage line operators in process to exceed EVA targets and maximize the strategic value of EVA

• Use “What-if” to enable line managers to simulate key value drivers, assumptions, risks and target the most critical and valuable success factors
• Use “Reports” and “Value” modules to analyze the EVA, and the value of their forward plans
• Achieve overall EVA Momentum, EVA goals, and with at least matching the company’s current market value and to improve over the prior’s year’s planning and current PRVit value

Capital Budgeting and Ad-Doc Decisions

Build bridges from business cases to FRS valuations

• Gather key project/decision assumptions and map into the FRS excel input template
• Upload and analyze base case and alternative scenarios in the “Value” module arriving at the same NPV answer using both the discounted cash flow and discounted EVA method

Acquisition Pricing

Apply a set of tools that flex from simple to more accurate as your evaluation process evolves

• Use “PRVit” to estimate a target’s intrinsic value given its recent performance trends
• Use “What-if” to develop and value base-case forecast, and gain appreciation for key value drivers
• Review target’s trailing MVA, EVA, ROC, EVA Margin, EVA Momentum, and EVA Risk metrics in isolation and in comparison with peers and “best practices.” Use the refined assumptions to re-forecast and re-value the target using “What-if.”
• Upload the forward plan submitted by the target or its banker into “Reports” and “Value” modules to analyze and value