EVA:一个较好的财务绩效评价方法外文翻译
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1、中文 3487 字 本科毕业论文(设计) 外 文 翻 译 原文: EVA: A better financial reporting tool Economic Value Added (EVA) is a financial performance measure being adopted by many companies in corporate America. This new metric, trademarked by Stern Stewart and Company, is a profit measure based on the concept of true econ
2、omic income which includes the cost of capital for all types of financing. EVA provides a more comprehensive measure of profitability than traditional measures because it indicates how well a firm has performed in relation to the amount of capital employed. This article summarizes the EVA concept of
3、 measuring profitability, the EVA calculation and the benefits of adopting an EVA framework. The EVA Concept of Profitability EVA is based on the concept that a successful firm should earn at least its cost of capital. Firms that earn higher returns than financing costs benefit shareholders and acco
4、unt for increased shareholder value. In its simplest form, EVA can be expressed as the following equation: EVA = Operating Profit After Tax (NOPAT) - Cost of Capital NOPAT is calculated as net operating income after depreciation, adjusted for items that move the profit measure closer to an economic
5、measure of profitability. Adjustments include such items as: additions for interest expense after-taxes (including any implied interest expense on operating leases); increases in net capitalized R&D expenses; increases in the LIFO reserve; and goodwill amortization. Adjustments made to operating ear
6、nings for these items reflect the investments made by the firm or capital employed to achieve those profits. Stern Stewart has identified as many as 164 items for potential adjustment, but often only a few adjustments are necessary to provide a good measure of EVA.1 Measurement of EVA Measurement of
7、 EVA can be made using either an operating or financing approach. Under the operating approach, NOPAT is derived by deducting cash operating expenses and depreciation from sales. Interest expense is excluded because it is considered as a financing charge. Adjustments, which are referred to as equity
8、 equivalent adjustments, are designed to reflect economic reality and move income and capital to a more economically-based value. These adjustments are considered with cash taxes deducted to arrive at NOPAT. EVA is then measured by deducting the companys cost of capital from the NOPAT value. The amo
9、unt of capital to be used in the EVA calculations is the same under either the operating or financing approach, but is calculated differently. The operating approach starts with assets and builds up to invested capital, including adjustments for economically derived equity equivalent values. The fin
10、ancing approach, on the other hand, starts with debt and adds all equity and equity equivalents to arrive at invested capital. Finally, the weighted average cost of capital, based on the relative values of debt and equity and their respective cost rates, is used to arrive at the cost of capital whic
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