How EVA works against GATX. (economic value added)(The Two Faces of EVA): An article from: Chief Executive (U.S.)

This digital document is an article from Chief Executive (U.S.), published by Chief Executive Publishing on January 1, 1996. The length of the article is 1404 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

From the supplier: The economic value added (EVA) model is an increasingly popular measure of corporate and management performance. EVA is calculated by subtracting total beginning capital multiplied by weighted average cost of capital from net operating profit after taxes. While it is acknowledged as an excellent tool for gauging whether a company is gaining or losing value, it has been proven that EVA has components that make it inappropriate for some companies. The experience of Chicago, IL-based transportation and distribution equipment leasing company GATX illustrates the model's unsuitability to capital-intensive firms that invest in assets with long-term returns. EVA does not take into account the long-term value inherent in GATX's capital structure in which assets retired from service or sold when a lease term expires are replenished by constant reinvestments.

Citation Details
Title: How EVA works against GATX. (economic value added)(The Two Faces of EVA)
Author: James J. Glasser
Publication:Chief Executive (U.S.) (Magazine/Journal)
Date: January 1, 1996
Publisher: Chief Executive Publishing
Issue: n110 Page: p42(2)

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