Integration of Net Present Value (NPV), Economic Value Added (EVA), and Free Cash Flows (FCF)

2009 ◽  
Author(s):  
Jacques Saint-Pierre
Keyword(s):  
Net Present Value ◽  
Economic Value ◽  
Value Added ◽  
Cash Flows ◽  
Economic Value Added ◽  
Present Value ◽  
Free Cash Flows

scholarly journals Assessment of the Efficiency of Different Forms of Financing

2019 ◽  
Vol 8 (3) ◽  
pp. 1989-1995
Keyword(s):  
Income Tax ◽  
Net Present Value ◽  
Economic Value ◽  
Value Added ◽  
Comprehensive Assessment ◽  
Economic Value Added ◽  
Present Value ◽  
Return On Equity ◽  
Investment Capital ◽  
Tax Savings

The study analyzes various criteria and forms for assessing the effectiveness of financing the activities of enterprises. A methodological toolkit has been developed for the comprehensive assessment of the effectiveness of various forms of financing the activities of enterprises, taking into account the significance of criteria. The following criteria are considered: tax savings on income tax excluding the time factor, cost of the i-th source of attraction, economic value added, increase in return on equity, the profitability of investment capital, net present value.

Међузависност додате економске вредности, нето садашње вредности и тржишне вредности предузећа // Interdependence of Economic Value Added, Net Present Value and Market Value of a Company

2018 ◽  
Vol 13 (22) ◽  
pp. 53
Author(s):  
Милорад Иванишевић
Keyword(s):  
Net Present Value ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Company Performance ◽  
Economic Value Added ◽  
Present Value ◽  
Market Value Added ◽  
One Year ◽  
A Company

Резиме: У чланку се најпре разматра додата економска вредност као метод за мерење перформанси предузећа у временским интервалима од годину дана. Затим се расправља о додатој тржишној вредности као разлици између тржишне вредности предузећа и вредности инвестираног капитала. После тога се објашњава међузависност додате економске вредности и додате тржишне вредности. На крају се показује да постоји повезаност нето садашње вредности као метода за оцену рентабилности инвестиција и тржишне вредности предузећа.Summary: Economic value added as a method for company performance measurement for time periods of one year is firstly analyzed in the paper. After that we discuss market value added as a difference between company market value and value of invested capital. Then the interdependence between economic value added and market value added is explained. Finally, we point out that there is relationship between net present value as a method for investment rentability evaluation and company market value.

Valmont Industries, Inc.

2017 ◽  
pp. 1-20
Author(s):  
Kenneth M. Eades ◽  
Jay Caver ◽  
Jennifer Hill
Keyword(s):  
Stock Price ◽  
Net Present Value ◽  
Cost Of Capital ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Present Value ◽  
Price Performance

This case serves as an introduction to the concept of economic value added (EVA). The student is placed in the position of Valmont's CFO to decide whether EVA can live up to its promise to motivate managers to act like shareholders and ultimately lead them to make value-enhancing decisions that can reverse Valmont's weak earnings and lackluster stock-price performance. The case works best if students are acquainted with the concepts of cost of capital and net present value. The teaching note that is available for registered faculty explains how to incorporate the accompanying six-minute video supplement.

scholarly journals A Novel Biodiesel and Glycerol Carbonate Production Plant

2011 ◽  
Vol 9 (1) ◽  
Author(s):  
Nghi T. Nguyen ◽  
Yaşar Demirel
Keyword(s):  
Net Present Value ◽  
Economic Value ◽  
Value Added ◽  
Biodiesel Production ◽  
Glycerol Carbonate ◽  
Production Plant ◽  
Present Value ◽  
Carbonate Production ◽  
Market Values ◽  
Value Added Products

Crude glycerol is the byproduct of biodiesel production plant and the economic value of glycerol may affect the profitability of the biodiesel production plant. As the production rate of bioglycerol increases, its market values drop considerably. Therefore, conversion of bioglycerol into value-added products can reduce the overall cost, hence, leading to a more economical biodiesel production plant. In a direct carboxylation reaction, CO2 reacts with glycerol to produce glycerol carbonate and water. This study presents a direct comparison of the economic analysis of the conventional biodiesel production plant and the possible next generation biodiesel-glycerol carbonate production plant. At the end of 15-year project, the net present value of the biodiesel-glycerol carbonate production plant is $13.21 million higher than the conventional biodiesel plant. The stochastic model has predicted that the biodiesel-glycerol carbonate and conventional biodiesel production plants has about 30% and 63% chance of getting negative net present value, respectively. Heterogeneous catalyst, Ca3La1, is used for transesterification reaction to reduce separation steps in the biodiesel production process.

scholarly journals The lifecycle of the firm, corporate governance and investment performance

2014 ◽  
Vol 11 (2) ◽  
pp. 224-238 ◽  
Author(s):  
Jimmy A. Saravia Matus
Keyword(s):  
Corporate Governance ◽  
Agency Costs ◽  
Net Present Value ◽  
Cash Flows ◽  
Present Value ◽  
Investment Performance ◽  
Empirical Results ◽  
Free Cash Flows

According to firm lifecycle theory the agency costs of free cash flows are not transitory problems but are a persistent issue for mature firms. This paper extends the theory by suggesting that to neutralize the threat of takeover the controlling parties of maturing firms progressively deploy antitakeover provisions, and this allows them to overinvest safely and prevent retrenchment. Another contribution of this paper is to develop a new empirical index that permits the identification of mature corporations with governance problems due to agency costs of free cash flows. Empirical results show that as firms mature free cash flows increase, more antitakeover provisions are put into place and negative net present value projects are undertaken.

The Siemens Digitalization Strategy in a Value-Based Management Framework

2021 ◽  
pp. 183-209
Author(s):  
Diana Claudia Cozmiuc ◽  
Ioan I. Petrisor
Keyword(s):  
Business Models ◽  
Net Present Value ◽  
Economic Value ◽  
Digital Technologies ◽  
Value Added ◽  
Economic Value Added ◽  
Discounted Cash Flow ◽  
Business Context ◽  
Value Based Management ◽  
New Business

The digital economy is growing at unprecedented speed and scale. Digital technologies generate the digital transformation of everything – organizations, industries, society. Digital technologies and digital business models disrupt industries in a digital vortex to a different degree by industry. In the new business context, value creation changes from the classical net present value of discounted cash flow or economic value added. Changes are given mostly by uncertainty. Reconciling classical value with digitalization becomes a research topic – the topic of this chapter. The chapter is a case study on Siemens, a Harvard Business Review case in digitalization, and one of the most important value-based management practitioners in the world, in the view of the economic value added model and in the view of journals indexed in Web of Science. The Siemens case is used to explore how economic value added and digitalization can work together and finds that they do in different stages that follow the logic of the innovation lifecycle.

ECONOMIC VALUE ADDED V. DISCOUNTED CASH FLOW: VALUE-BASED MANAGEMENT METHODS COMPARED

10.12737/1851 ◽  
2013 ◽  
Vol 7 (9) ◽  
pp. 82-91 ◽  
Keyword(s):  
Growth Rate ◽  
Cash Flow ◽  
Net Present Value ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Discounted Cash Flow ◽  
Value Based Management ◽  
Company Value ◽  
Return On Capital

The article analyses the respective advantages of Economic Value Added (EVA) and Net Present Value (NPV) for Company Value Management in terms of the Value Based Management (VBM). The author considers the methods of EVA identification and value appraisal comparison and relates EVA to NPV. The article also presents the results of the author’s empirical study of the relations between the market value of firm, return on investment and growth rate; suggests a list of pre-conditions for discounted cash flow and EVA yielding equal assessment results; presents the simulation data acquired through the imitation of the interconnection between growth rate, re-investment and return on capital being violated.

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