ISS EVA
Financial Intelligence for Measuring & Maximizing Value
Measure, analyze, and value corporate performance.
EVA is an established standard in measuring, analyzing, projecting, valuing, and discounting a firm’s underlying economic profit rather than its accounting profit. With coverage of 21,000+ public companies, this solution enables investors to measure, analyze, and value corporate performance and inform investing decisions.
28,000
COMPANIES COVERED
The EVA platform allows investors to parse through thousands of companies globally with comparable accounting adjustments to drive informed investment decision making on a systematic basis.
Now part of the ISS Analytics suite of solutions, EVA provides investors with a differentiated approach to the investment decision process.
Superior to traditional measures of profit
EVA cuts through accounting distortions and charges for the use of capital
Consistent, transparent framework
EVA is comparable across companies, industries and countries
Style agnostic
Provides an unbiased view of Quality, Value, and Growth investment opportunities
Global coverage
Coverage spans 21,000+ companies globally, with historical data going back two decades
Leading indicators
EVA metrics could provide information that may lead to future stock prices
DEFINING EVA
EVA =
Sales – Operating Costs* – Capital Costs**
*Net operating profit after tax **Cost of cap% x net business assets
EVA converts accounting profit to economic profit by reversing accounting distortions and measuring the dollar value profit after ALL costs, including the cost of giving shareholders a fair return on invested capital (this is a critical point).
Best practice EVA is the next generation of EVA.
Convert traditional EVA dollar-based profit measure into a powerful ratio-based framework.
We were delighted to incorporate a set of EVA metrics into our company rankings, which serve as the foundation of the Wall Street Journal’s annual Management Top 250 list. After all, Peter Drucker himself was a huge fan of EVA. That’s because he recognized that, unlike purely accounting profit, EVA takes stock of operating efficiency, asset management, capital discipline, and profitable growth—all in a single measure. In other words, it is a particularly keen gauge of how effectively a company is being managed, and that is exactly what we’re trying to capture in our rankings.
Rick Wartzman, Head of the Drucker Institute’s KH Moon Center for a Functioning Society
Use EVA to Screen for Idea Generation, Conduct Peer Comparisons, and Company or Portfolio Analyses
Screening & Idea Generation
Use the EVA platform to narrow the universe of investible ideas to those that are likely to outperform using an objective investment framework.
Single / Multiple Stock Analysis
Analyze the overall EVA profitability of a company, the choices management made to drive that EVA, and value the company with unique metrics.
Portfolio Analysis
View a fund’s exposure to EVA relative to benchmark. Display active weightings to better assess sources of risk and alpha.
