Setembro de 2002
Accounting is Broken
Here’s How to Fix It
A RADICAL MANIFESTO
Evaluation
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|
• The real accounting scandal is not that a handful
of companies like Enron and WorldCom broke accounting rules
to inflate their earnings, but that almost every company is
bending the rules to smooth earnings and meet investor expectations.
• Ethical managers have slipped into unethical behavior
because bookkeeping has become unhinged from value. Accounting
is no longer counting what counts. It has forfeited its moral
authority to control and to guide executive behavior.
•
What the public demands, and what in fact is needed, is a single
measure of earnings that is capable of reliably indicating the
intrinsic value of all companies in all times.
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Outubro de 2002
Stern Stewart's EVA Clients Outperform the Market and
Their Peers
Empirical Research Revised Outubro de 2002
Evaluation
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Companies that have adopted Stern Stewart’s
EVA framework for performance management, value-based planning
and incentive compensation have realized a very high return.
As reported in a prior Stern Stewart study, companies that
implemented EVA in the 1990’s outperformed their peers
by an average of 8.3% per annum over the five years following
adoption and created total excess shareholder wealth of $116
billion. A separate academic study demonstrated that substantial
improvements in EBITDA and operating margins, faster assets
turns and stronger cash flow generation were the drivers of
the superior stock market performance.
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Maio de 2002
Enron Signals the End of the Earnings Management Game
Evaluation
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Enron failed for many reasons, but one noteworthy cause was
management's "laser focus on earnings-per share."
Their EPS mania drove management to over-invest capital in
their business for inadequate returns, to over-leverage their
balance sheet, and to use "over-the-top" accounting.
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Abril de 2002
How to Structure Incentive Plans that Work
Evaluation
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The most effective incentive strategies make managers and
employees to think and act like owners by paying them like owners.
Owner incentives are not a cost to be minimized, but a share
of value to be maximized. The bigger the incentive pay the
better it is for all concerned.
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Dezembro de 2001
EVA and Corporate Portfolio Strategy
Evaluation
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Many companies are now pressed to find exactly where they
are creating value and where they are destroying value within
their portfolios. Yet 80% of companies cannot measure returns
on assets below the business unit level. In practice, meaningful
measures of customer, product and SKU profitability remain a
distant dream. |
Novembro de 2001
Evaluating Mergers and Acquisitions - How
to avoid overpaying
Evaluation
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Executive Summary
Most acquirers tend to overpay because they overestimate the
value they will add to the target and execute poorly in delivering
promised benefits.
This article discusses how Boards of Directors, CEOs, CFOs
and Corporate Strategists can use EVA-based valuation and
performance management techniques to improve their company's
chances of success in M&A and other major investments.
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Maio de 2001
One Way to Close the Oil Industry's Credibility Gap:
Hedge PDP Production and Buy Back Stock
Evaluation
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The market values of North American E&P companies have
failed to increase in proportion to commodity prices over the
past year and a half. A joint study performed by Stern Stewart
and John S. Herold concluded that many firms are trading at
a significant discount to the intrinsic value of their proven
hydrocarbon reserves. |
Abril de 2001
M&A: Why Most Winners Lose
Evaluation
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American companies in 2000 continued the explosion of M&A
activity that began after the economic slump in the early 1990s.
Reported transaction value reached a record $1.75 trillion —
22.6% higher than 1999. But what have been the benefits of all
this acquiring and merging, and what lessons can managers find
in the distribution of those benefits? |
Abril de 2001
Why So Many Dotcoms Failed
and How to Succeed with the Internet
Evaluation
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Massive failures in the dot-com sector (called "dot-bomb"
by many) have caused most businesses to reconsider their Internet-based
investments and strategy. |
Março de 2001
The Equity Risk Measurement Handbook
Evaluation
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The corporate cost of equity capital is determined in part
by the market risk premium for equities – that is, the
amount by which the return on stocks as a group is expected
to exceed the risk-free rate. Our study estimates the market
risk premium over today's long bond to be about 5 percentage
points. |
Fevereiro de 2001
Herman Miller: Growth In The New Economy
Evaluation
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The office furniture company transformed a failed business
plan — refurbishing used furniture for the small-office
market — into a successful niche player called SQA (for
Speedy, Quick and Affordable) that relied on new technology
to bring a service orientation to what had been a product-driven
market. |
Fevereiro de 2001
EVA® & Strategy II: Portfolio Management
Evaluation
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Last year's dismal NASDAQ performance and
the end of the dotcom gold rush mark a return to more rational
markets and valuations and a resurgent interest among managers
to drive enduring growth in fundamental value. But how? Often
when a company's stock is down, its first instincts can backfire.
Here's a guide to help managers understand how to apply and
interpret EVA — a simple, powerful but often misused tool
— to their portfolio of businesses. |
Novembro de 2000
Best of Times, Worst of Times
Evaluation
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Stern Stewart & Co.'s automotive practice
undertook an economic review of 14 global automotive OEs. After
recasting all data to an "apples-to-apples" economic
basis with EVA, we Evaluate the economics of the industry, benchmark
both performance and valuation, and relate these to strategy. |
Setembro de 2000
The New Math: 4 > 8
Evaluation
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In conjunction with Morgan Stanley Dean
Witter, we have undertaken an economic review of 11 North American
Airlines. After recasting all data to an "apples-to-apples"
economic basis with EVA, we benchmark both performance and valuation,
and relate these to strategy. We also Evaluate the
economics of the industry and examine the case for airline consolidation
in the North American market. |
Agosto de 2000
IT Outsourcing and Shareholder Value
Evaluation
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Outsourcing non-strategic processes eliminates a distraction,
enabling management to focus its distinctive capabilities on
areas critical to its strategic success. |
Julho de 2000
EVA and Lean Manufacturing
Evaluation
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Whether you benchmark to Dell, Cisco or Toyota – Jonah
has a role in the New Economy. Despite 20 years of investments
in lean manufacturing, TOC, pull systems, SPC, TQM, and now
Six Sigma, "The Goal" remains elusive. Every company
has its showcase facility, but success is difficult to sustain
and replicate on a global corporate scale. |
Maio de 2000
Compensation Strategy for the New Economy Age
Evaluation
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Talent of all levels is flooding to the "New Economy"
making it difficult for "Old Economy" companies to
lead this important strategic transition. |
Abril de 2000
EVA and Strategy
EVAluation
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PDF |
How to link operating performance, enterprise value and strategic
thinking in the New Economy Age |
Fevereiro de 2000
Internet Valuation
Evaluation
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PDF |
Why are internet share valuations so high? With all the
hysteria, we decided to provide a primer on why this sector
is valued so highly. Many business leaders fear the risks
but it is, in fact, the uncertainty and volatility that drives
the share values so high. This is true even if we leave aside
who will win and who will lose. The possibilities for the
sector are extensive.
análise da rapidez com que o setor apóia e
desenvolve novas tecnologias e habilidades, e como o EVA,
através da capitalização dos valores
gastos em pesquisa & desenvolvimento e propaganda &
marketing se mostra muito superior a outras métricas
financeiras neste setor. |
Applications in Real Options and
Value-based Strategy
Excerpted from "Real Options and Business Strategy
- Applications to Decision Making"
|
Managing for value has become the mantra
of today's executive in the US and, increasingly, in other parts
of the world, such as Germany and Japan. Companies as diverse
as Siemens, Sony and Molson have publicly announced the formal
implementation of economic value added (EVA) management systems
in their quest for the value-maximisation proposition. |
Outubro de 1999
Lessons from Gorbachev
Evaluation
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PDF |
How to Avoid the Stifling Problems of Over-Centralised Bureaucracy |
Junho de 1999
The Capitalist Manifesto
Evaluation
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The Transformation of the Corporation - Employee Capitalism |
Maio de 1999
The Value of R&D
Evaluation
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PDF |
Creating Value Growth through Research & Development |
Abril de 1999
ABC, The Balanced Scorecard and EVA
Evaluation
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Distinguishing the Means from the End |
Março de 1999
UK Remuneration Practices
Evaluation
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Do UK Incentives Align Managers With Shareholders? |
