EVATraining-EVA最好的培訓(xùn)資料(共34張)

1、Introduction to EVA Management System Contentsv What is EVA?v The calculation of EVAv The EVA management systemContentsv What is EVA?v The calculation of EVAv The EVA management systemEVA is Earnings After the Cost of CapitalRevenues- Operating Costs- Depreciation-/+ Adjustments- Taxes= Operating In

2、come After Tax (NOPAT) Capital x c% Capital Charge= EVAP/LB/SThe intrinsic value is the determinant of the market value in efficient capital market MVA, Stock price EVA ROI, Capital turnover, margin Market share, Unit cost, scrap rate, delivery timeCompetitive strategyBusiness modelManagement system

3、Operating efficiencyUS as exampleUS as example50%40%30%20%10%Correlation with stock priceEVA ROE Cash Flow EPS RevenueAs a measure of business intrinsic value, EVA correlates with stock price better than other measuresEVA measure gives more insights into the businessFrom Enrons 2000 Annual Report (L

4、etter to Shareholders):Enrons performance in 2000 was a success by any measureThe companys net income reached a record in 2000. Enron is laser-focused on earnings per share, and we expect to continue strong earnings performance.(in mil)Net IncEPSEVA(in mil)Contentsv What is EVA?v The calculation of

5、EVAv The EVA management system 9From the traditional accounting model to the economic model of the firmAccountingFrameworkEVAFrameworkAdjustmentsP&LBalance SheetCash Flow StatementNOPATCapitalEVAv Separate financing effects from operating performancev Extend matching of costs with revenue to economi

6、c basis v Separate operating from non-operatingv Eliminate book keeping entries/reserves that distort cash flow and reduce objectivitySo as tov To better reflect value creationv To motivate the right value-creating behavior 10Optimizing the EVA Measurev MaterialityDifference in EVA with or without a

7、djustment Is it material?Set a rule of thumb and use common sensev MotivationAdjustment must motivate managers to do the right thingStart with dysfunctional behaviors in standard operating proceduresv Data AvailabilityCost of collecting information must be reasonablev SimplicityEVA is for operating

8、people keep it simpleA fully adjusted EVA is too complicated to use and communicate 11The EVA Calculation Precision VariesBasic EVATailored EVATrue EVADisclosed EVA 12ADJUSTMENTSCash toEconomicNon-operatingItemsNon-recurringEventsAccrual toCashAccounting conservatism treats many investments as curre

9、nt expenses (R&D, significant Marketing/Training - only those specifically relating to a “strategic”purpose) EVA views them as investments in the future Accounting misstates cash flow(Reserves)EVA seeks to emphasize actual cash eventsAccounting distorts ongoing operating performance(Restructuring an

10、d Asset sales)EVA treatment avoids profit peaks and troughsItems not included in the normal course of business, or not usually managed at unit level (Interest Expense from Debt; Other Financing)In the EVA framework, we must turn the accounting model into an economic model 13 Cost of Debt Cost of Cap

11、ital ? %+Cost of Equity? %? %The cost of capital comprises both debt & equity costsRisk Free RateEquity Risk PremiumDebt Premium (Credit spread) 14Cost ofEquity Capital (required return byequity holders)Risk ()Risk-FreeRate RfMarket Risk PremiumMRP(Rm - Rf )Relationship between Risk and ReturnMarket

12、 Risk = 1Cost of Equity = Rf + (Beta x MRP)A Beta value is required to determine cost of equity 15In general, a higher business risk implies higher beta value, hence higher cost of equity 16To calculate Beta, a list of peers need to be identified for Clientv A peer company is not necessarily a compe

13、titor, but rather a company engaged in principally similar business subject to the same underlying economic forces. They may be competitors or companies in similar industries and business environments.v Peer comparisons are used to :Derive Betas for the respective business units and the corporation

14、to facilitate cost of capital (COC) calculations. Non-listed companies, wholly-owned subsidiaries and business units do not have publicly traded shares from which to measure the levered Betas. Where possible, a pure-play analysis of publicly traded peer companies is used to estimate the unlevered Be

15、ta, or BRI. This is then translated into the levered Beta for that company, using the capital structure and the cost of debt.Benchmark EVA performance and identify value drivers.Contentsv What is EVA?v The calculation of EVAv The EVA management system 18EVAEVAEVAEVAEVAEVA provides a comprehensive va

16、lue management framework to translate strategy into action 19From EVA Goal Setting to Execution EPS Consensus Estimates Industry Data Benchmarking Internal forecasts Simulations of past historyClient Strategic Goals Consolidated EVA Growth GoalBusiness Unit EVA Growth GoalsOperating PlansCapital Pla

17、nsResults/OutlookReportingEVA PlansReasonableness CheckMarket ExpectationsInternal ForecastsAccuracy CheckGoal setting is not an issue of the right number, but one of alignmentALIGNMENT 20Goal setting and benchmarking 21In the EVA framework, Market Value can be broken down into Future Growth Value a

18、nd Current Operations Value CapitalPV of current EVA in perpetuityPV of EVA ImprovementMVA = Present Value of Current EVA + Present Value of Expected Improvements to Current EVAFuture Growth Value (FGV)CurrentOperationsValue (COV)MarketValueMarket Value Added(MVA)Capital 22Future growth value repres

19、ents an expectation of increase in EVAMarketValueCurrent OperationsValue(COV)Future Growth Value (FGV)Expected Improvementsin EVAqFuture Growth Value represents the premium on the value of current operations (Capital + EVA/c*).qThe presence of a Future Growth Value, which equals PV of all future EVA

20、 improvements, signals the managers that owners/investors expect increases in EVA.qIncreases in EVA will also drive increases in MVA. As a result Investor Wealth will go up as well. 23Applying “industry average growth expectations” to Clients 1999 EVA, we estimate an FGV of $691mFGV 39%COV 61%1999 C

21、lient EVA1999 COV 1,069mFGV ?vIf we know Clients 1999 COV is $1060m (COV = 1999 capital + 1999 EVA / WACC) then we can calculate FGV based on the industry average COV:FGV ratio of 69:31v1999 EVA could be considered an abnormally good year for Client, so applying an average EVA from 97-00 (a lower EV

22、A), the FGV for Client would come out to $319MEstimated FGV(using 1999 EVA)FGV 691mConservativeClients Industry Ratio1999COV 1,069mCAPITAL526mEVA / C544mEstimated FGV(using avg. 97-00 EVA)FGV 319m97-00COV 493m 24Taking Clients FGV of $691m, we convert it into implied annual Expected Improvements in

23、EVA (EI) 2000 COV$(18m)FGV$691m20012003200220042005 . 2010Expected Improvement (EI) $26 millionMarket Value$673MAssuming Client were to achieve this EVA growth over a 10 year period, annual EVA improvements would have to be $26 million a year.FGVEI (for 10 Years)Aggressive$691m$26m per yearConservat

24、ive$319m$12m per year 25To achieve EIs, management should first understand the current EVA by focusing on return on capitalMargin xTurnover=ROCScenario A 20%x0.75= 15%Scenario B 5%x3.0= 15%NOPATCapitalProfitMarginCapitalTurnoverXNOPATSalesSalesCapitalXorDissecting the rateof return brings to lightth

25、e trade-offs betweenprofit margin andcapital efficiency.= A company could achieve a 15% return by either: 26A company can use ROC curves to understand and map out its strategy to improve returnsROC 4%A: ROC 15%BROC 15%0.0%10.0%20.0%30.0%0.0 x0.5x1.0 x1.5x2.0 x2.5x3.0 x3.5x4.0 xSales per dollar of Ca

26、pitalNopat per dollar of SalesROC 20%ROC 5%ROC 10% 27Client 1999Client 2000Client peers use fundamentally different business strategies to create value in the industry 28Total Operation Expense Margin0%20%40%60%80%100%120%BaltransEGLExped.Client 1999Client 2000AirborneAtlasCNFFedexUPSAverage% of Sal

27、esNOPAT Margin-5%0%5%10%15%20%25%30%35%BaltransEGLExped.Client 1999Client 2000AirborneAtlasCNFFedexUPSAverage% of SalesVariable Expenses Margin0%10%20%30%40%50%60%70%80%EGLExped.Client 1999Client 2000AirborneAtlasFedexUPSAverage% of SalesFixed Expenses Margin0%10%20%30%40%50%60%70%80%90%EGLExped.Cli

28、ent 1999Client 2000AirborneAtlasFedexUPSAverage% of SalesBenchmarking NOPAT margins give Client a sense of how it falls in terms of operating efficiencyNote: Baltrans and CNF removed from Variable and Fixed Expense drivers analysis due to insufficient data 29Capital Charge Margin0%5%10%15%20%25%30%3

29、5%40%BaltransEGLExped.Client 1999Client 2000AirborneAtlasCNFFedexUPSAverage% of SalesNWC Capital Charge Margin0%1%2%3%4%5%6%7%BaltransEGLExped.Client 1999Client 2000AirborneAtlasCNFFedexUPSAverage% of SalesFixed Assets Charge Margin0%5%10%15%20%25%BaltransEGLExped.Client 1999Client 2000AirborneAtlas

30、CNFFedexUPSAverage% of SalesOther Capital Charge Margin-2%0%2%4%6%8%10%12%BaltransEGLExped.Client 1999Client 2000AirborneAtlasCNFFedexUPSAverage% of SalesCapital benchmarking points to working capital and fixed assets as an opportunity for Client to drive EVA upwards 30Summary of Benchmarking study

31、1999 Data In Thousands of USD Company / ItemsBaltransEGLExped. Client 1999Client 2000 AirborneAtlasCNFFedexUPSAverageBest in ClassSales100%100%100%100%100%100%100%100%100%100%100%100%Var. Exp / Sales97%62%69%34%54%34%11%N/A14%8%17%8%Fixed Exp / SalesN/A16%23%45%45%58%59%94%79%78%74%16%Selling / Sale

32、s N/A15%1%1%1%2%0%N/A0%0%1%0%- Operation Expenses / Sales97%92%94%80%101%95%71%94%93%85%88%23%- Tax / Sales0%3%1%1%0%2%12%2%5%4%5%0%+ Other Income / Sales2%1%0%0%0%1%15%1%4%-6%3%15%= NOPAT Margin5%5%5%20%-1%4%32%5%7%5%7%NWC Charge / Sales1%1%1%6%6%0%5%0%0%1%1%0%Fixed Assets Charge / Sales1%0%1%2%3%3

33、%21%2%4%5%7%2%Other Assets Charge / Sales0%1%0%-1%3%1%10%2%5%0%4%0%- Capital Charge / Sales3%3%2%8%12%5%36%4%9%6%12%= Net Margin2%2%3%11%-13%-1%-4%1%-2%-1%-5%x Sales172,127595,1731,444,57519,53413,4183,140,226637,0815,592,81016,773,47027,052,000=EVA3,25912,63845,4452,240(1,726)(24,340)(22,405)68,874

34、(361,190)(261,400) 31Aboitiz Air0.0 x1.0 x2.0 x3.0 x4.0 x5.0 x6.0 x7.0 x8.0 x9.0 x10.0 x-5%0%5%10%15%20%25%30%NOPAT MarginCapital TurnoverROC 130%ROC 45%ROC 26%Looking at best in class Margin and Turnover, we can chart the EVA of Client under different scenarios(B)Achieve Best in Class Turns(D)Achie

35、ve Best in Class ROC(A)Achieve Best in Class NOPAT Margin(C)Also Best in Class TurnsHistoryPeer BenchmarkClient ForecastClient 97-99Best In Class 97-99CompanyClient, Inc. 2000-2005NOPAT Margin15.0%25.6%Atlas Air7.5%Capital Turnover 313.6%505.0%Expeditors266.1%Return on Capital45.2%45.2%Client, Inc.23.0% 32Client Best In Class Ana