咨询最好的公司-思腾思特的培训资料.ppt

New York Chicago Los Angeles London Paris Milan Munich Tokyo Sao Paulo Singapore Sydney Johannesburg Shanghai,Introduction to EVA Management System,Contents,What is EVA? The calculation of EVA The EVA management system,Contents,What is EVA? The calculation of EVA The EVA management system,EVA is Earnings After the Cost of Capital,Revenues - Operating Costs - Depreciation -/+ Adjustments - Taxes = Operating Income After Tax (NOPAT) Capital x c% Capital Charge = EVA,Objective: Continuous Improvement in EVA,P/L,B/S,The intrinsic value is the determinant of the market value in efficient capital market,Intrinsic value,Financial measures,Operating metrics,MVA, Stock price,EVA,ROI, Capital turnover, margin,Market share, Unit cost, scrap rate, delivery time,Competitive strategy Business model Management system Operating efficiency,Market value,US as example,50%,40%,30%,20%,10%,Correlation with stock price,EVA ROE Cash Flow EPS Revenue,As a measure of business intrinsic value, EVA correlates with stock price better than other measures,EVA measure gives more insights into the business,From Enrons 2000 Annual Report (Letter 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 Inc,EPS,EVA,(in mil),Contents,What is EVA? The calculation of EVA The EVA management system,From the traditional accounting model to the economic model of the firm,Separate financing effects from operating performance Extend matching of costs with revenue to economic basis Separate operating from non-operating Eliminate book keeping entries/reserves that distort cash flow and reduce objectivity So as to To better reflect value creation To motivate the right value-creating behavior,Optimizing the EVA Measure,Materiality Difference in EVA with or without adjustment Is it material? Set a rule of thumb and use common sense Motivation Adjustment must motivate managers to do the right thing Start with dysfunctional behaviors in standard operating procedures Data Availability Cost of collecting information must be reasonable Simplicity EVA is for operating people keep it simple A fully adjusted EVA is too complicated to use and communicate,The EVA Calculation Precision Varies,Basic EVA,Tailored EVA,True EVA,Disclosed EVA,Cash to Economic,Non-operating Items,Non-recurring Events,Accrual to Cash,Accounting conservatism treats many investments as current 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 events,Accounting distorts ongoing operating performance (Restructuring and Asset sales) EVA treatment avoids profit peaks and troughs,Items 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,Cost of Debt,Cost of Capital ? %,+,Cost of Equity,? %,? %,The cost of capital comprises both debt & equity costs,Risk Free Rate,Equity Risk Premium,Debt Premium (Credit spread),A Beta value is required to determine cost of equity,In general, a higher business risk implies higher beta value, hence higher cost of equity,To calculate Beta, a list of peers need to be identified for Client,A peer company is not necessarily a competitor, 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. Peer comparisons are used to : Derive Betas for the respective business units and the corporation 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 Beta, 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.,Contents,What is EVA? The calculation of EVA The EVA management system,Strategy Formation,Goal Setting,Planning & Budgeting,Execution,Evaluation,Motivation,EVA,EVA,EVA,EVA,EVA,Motivation Strategy Goal Setting Planning Execution Evaluation & Budgeting,Value Based Management,EVA provides a comprehensive value management framework to translate strategy into action,From EVA Goal Setting to Execution,EPS Consensus Estimates Industry Data Benchmarking Internal forecasts,Simulations of past history,Client Strategic Goals,Consolidated EVA Growth Goal,Business Unit EVA Growth Goals,Operating Plans,Capital Plans,Results/Outlook Reporting,EVA Plans,Reasonableness Check,Market Expectations,Internal Forecasts,Accuracy Check,Goal setting is not an issue of the right number, but one of alignment,ALIGNMENT,Goal setting and benchmarking,In the EVA framework, Market Value can be broken down into Future Growth Value and Current Operations Value,MVA = Present Value of Current EVA + Present Value of Expected Improvements to Current EVA,Future growth value represents an expectation of increase in EVA,Market Value,Expected Improvements in EVA,Future Growth Value represents the premium on the value of current operations (Capital + EVA/c*). The presence of a Future Growth Value, which equals PV of all future EVA improvements, signals the managers that owners/investors expect increases in EVA. Increases in EVA will also drive increases in MVA. As a result Investor Wealth will go up as well.,Applying “industry average growth expectations” to Clients 1999 EVA, we estimate an FGV of $691m,FGV 39%,COV 61%,1999 Client EVA,1999 COV 1,069m,FGV ?,If 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 69:31 1999 EVA could be considered an abnormally good year for Client, so applying an average EVA from 97-00 (a lower EVA), the FGV for Client would come out to $319M,Estimated FGV (using 1999 EVA),FGV 691m,Conservative Clients Industry Ratio,1999 COV 1,069m,CAPITAL 526m,EVA / C 544m,Estimated FGV (using avg. 97-00 EVA),FGV 319m,97-00 COV 493m,Taking Clients FGV of $691m, we convert it into implied annual Expected Improvements in EVA (EI),2000 COV $(18m),FGV $691m,2001,2003,2002,2004,2005 . 2010,Expected Improvement (EI) $26 million,Market Value $673M,Assuming Client were to achieve this EVA growth over a 10 year period, annual EVA improvements would have to be $26 million a year.,FGV EI (for 10 Years) Aggressive $691m $26m per year Conservative $319m $12m per year,To achieve EIs, management should first understand the current EVA by focusing on return on capital,Margin x Turnover = ROC Scenario A 20% x 0.75 = 15% Scenario B 5% x 3.0 = 15%,NOPAT Capital,Return on Capital,Dissecting the rate of return brings to light the trade-offs between profit margin and capital efficiency.,=,A company could achieve a 15% return by either:,A company can use ROC curves to understand and map out its strategy to improve returns,Client peers use fundamentally different business strategies to create value in the industry,Total Operation Expense Margin,0%,20%,40%,60%,80%,100%,120%,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,% of Sales,NOPAT Margin,-5%,0%,5%,10%,15%,20%,25%,30%,35%,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,% of Sales,Variable Expenses Margin,0%,10%,20%,30%,40%,50%,60%,70%,80%,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,Fedex,UPS,Average,% of Sales,Fixed Expenses Margin,0%,10%,20%,30%,40%,50%,60%,70%,80%,90%,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,Fedex,UPS,Average,% of Sales,Benchmarking NOPAT margins give Client a sense of how it falls in terms of operating efficiency,Note: Baltrans and CNF removed from Variable and Fixed Expense drivers analysis due to insufficient data,Capital Charge Margin,0%,5%,10%,15%,20%,25%,30%,35%,40%,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,% of Sales,NWC Capital Charge Margin,0%,1%,2%,3%,4%,5%,6%,7%,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,% of Sales,Fixed Assets Charge Margin,0%,5%,10%,15%,20%,25%,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,% of Sales,Other Capital Charge Margin,-2%,0%,2%,4%,6%,8%,10%,12%,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,% of Sales,Capital benchmarking points to working capital and fixed assets as an opportunity for Client to drive EVA upwards,Summary of Benchmarking study,1999 Data In Thousands of USD,Company / Items,Baltrans,EGL,Exped.,Client 1999,Client 2000,Airborne,Atlas,CNF,Fedex,UPS,Average,Best in Class,Sales,100%,100%,100%,100%,100%,100%,100%,100%,100%,100%,100%,100%,Var. Exp / Sales,97%,62%,69%,34%,54%,34%,11%,N/A,14%,8%,17%,8%,Fixed Exp / Sales,N/A,16%,23%,45%,45%,58%,59%,94%,79%,78%,74%,16%,Selling / Sales,N/A,15%,1%,1%,1%,2%,0%,N/A,0%,0%,1%,0%,-,Operation Expenses / Sales,97%,92%,94%,80%,101%,95%,71%,94%,93%,85%,88%,23%,-,Tax / Sales,0%,3%,1%,1%,0%,2%,12%,2%,5%,4%,5%,0%,+,Other Income / Sales,2%,1%,0%,0%,0%,1%,15%,1%,4%,-6%,3%,15%,=,NOPAT Margin,5%,5%,5%,20%,-1%,4%,32%,5%,7%,5%,7%,NWC Charge / Sales,1%,1%,1%,6%,6%,0%,5%,0%,0%,1%,1%,0%,Fixed Assets Charge / Sales,1%,0%,1%,2%,3%,3%,21%,2%,4%,5%,7%,2%,Other Assets Charge / Sales,0%,1%,0%,-1%,3%,1%,10%,2%,5%,0%,4%,0%,-,Capital Charge / Sales,3%,3%,2%,8%,12%,5%,36%,4%,9%,6%,12%,=,Net Margin,2%,2%,3%,11%,-13%,-1%,-4%,1%,-2%,-1%,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) Achieve Best in Class ROC,(A) Achieve Best in Class NOPAT Margin,(C) Also Best in Class Turns,History,Peer Benchmark,Client Forecast,Client 97-99,Best In Class 97-99,Compan