Content area
Full Text
Ionel BOSTAN
Stefan cel Mare University of Suceava, Romania
Dorel MATES
West University of Timisoara, Romania
INTRODUCTION
The EVA model is a management and evaluation instrument, used in measuring periodical performance, evaluation of investment projects of each activity of the company and delimiting the motivation and management stimulation systems, all in "newly created" or destroyed value.
In the first part of the paper, we are set to theoretically describe the model, that represents the substrate of our contributions presented in the end; we will make a synthesis of the main academic contributions from where this operational module derives, the increasing importance of the orientation towards value creation and the changes occurred in the financial and competitive reality, that have radically modified the reference area in which the companies the companies operate in the present times.
In the second part of the paper we continue with evaluating the companies that operate in the new economy, the EVA model fully finding its applicability where the traditional evaluating methods are found to be overcame and practically inapplicable, and proceeding with the last part, in which we focus our attention on the EVA characteristics as a performance measuring instrument, or as a possible management objective in investment choice making. In other words, the coherence between the value creating theory and other indicators involved in measuring the results is evaluated in comparability terms. Calculation problems are being analyzed regarding the investment decision of the invested capital and the conservative effect, possibly regarding different investments or profitability, determining the average balanced cost of the capital, decomposing the partial results afferent to different levels or parties.
More actually, the EVA can be defined as an innovative corporate government instrument, capable of introducing in the company a new management judgment, orientated as previously said towards value creation. The EVA model has been developed by the American "Stern Stewart & Co" consultancy company, that also established the acronym, "EVA", starting with the year 1982 gaining a great notoriety because of the book entitled " The Quest for Value: The EVATM - Management Guide " by G. Bennett Stewart, published by Hapeer Collins in 1991, but also because of the numerous articles published by the same consultancy company. In 1996, Drucker stated that...