Value-Based Management, a widely applied reference for strategic management, aims at maximizing sustainable shareholder value creation. However, respective accounting metrics to measure the firm’s wealth creation, such as residual income and Economic Value Added (EVA®), are distorted by...

Analysis of the strength of value drivers is crucial to understand their influence in the process of free cash flow generation. The paper addresses the issue of value driver measurement and ranking. The research reveals that, value drivers have similar pattern across industries. Furthermore, it...

Various researchers and practitioners, notably Stern Stewart Consulting Company andAssociates, have claimed economic value added (EVA) to be superior to traditional accounting measures in driving shareholder value. Other researchers have refuted these claims by supplying data in support of the...

Economic Value Added (EVA) is a value based performance measure that gives importance on value creation by the management for the owners. Profit maximization as a concept is age-old, wealth maximization is matured and value maximization is today's wisdom. Stern Stewart's EVA raises storm in...

The major financial objective of a firm is the maximization of its shareholders’ value. All management decisions and approaches should contribute to this objective. Management, though, faces the problem of determining what the effect of its actions would be on maximizing the shareholder’s...