经济附加值市场增加值和杠杆之间的关系文献翻译.docx

1、经济附加值市场增加值和杠杆之间的关系文献翻译经济附加值，市场增加值和杠杆之间的关系文献翻译原文：AbstractIt is generally believed that in order to maximize value for shareholders, companies should strive towards maximizing MVA (and not necessarily their total market value). The best way to do so is to maximize the EVA, which reflects an organizati

2、ons ability to earn returns above the cost of capital. The leverage available to companies that incur fixed costs and use borrowed capital with a fixed interest charge has been known and quantified by financial managers for some time. The popularization of EVA and MVA has opened up new possibilities

3、 for investigating the leverage effect of fixed costs (operational leverage) and interest (financial leverage) in conjunction with EVA and MVA, and for determining what effect changes in sales would have through leverage, not only on profits, but also on EVA and MVA. Combining a variable costing app

4、roach with leverage analysis and value analysis opens up new opportunities to investigate the effect of certain decisions on the MVA and the share price of a company. A spreadsheet model is used to illustrate how financial managers can use the leverage effects of fixed costs and the (fixed) cost of

5、capital to maximize profits and also to determine what impact changes in any variable like sales or costs will have on the wealth of shareholders.IntroductionFew would argue that the most important financial goal of a business organization should be to maximize the wealth of its shareholders. For a

6、number of years now, accounting measures such as earnings, return on assets and return on equity have been criticized and found wanting as performance indicators ending to greater shareholder wealth . The concept of value management resulted from a pursuit of the real drivers of value, and the perfo

7、rmance measures Economic Value Added (EVA) and Market Value Added (MVA) are now known fairly well and used widely by companies all over the world. The objective of this study is to link the cost management techniques of variable costing and cost- volume- profit analysis with the financial management

8、 techniques of leverage analysis and value analysis in order to determine how decisions or changes in inputs will affect the shareholder value. The study also introduces the leverage effect of the cost of equity as a new concept and illustrates how it reacts in conjunction with operating leverage an

9、d financial leverage to determine the total overall leverage of the company. This new approach would be useful for decision-making purposes in assessing the impact, not only of different decision alternatives, but also of changes in internal factors like production costs or external factors like inf

10、lation and tax rates. The findings of this study could be of value to managers at all levels in a business organization, but especially to financial managers. Existing shareholders and potential investors would also benefit from the findings of the study, but the company data needed as inputs for th

11、e model would not be available to them.The objective of this study is to link the cost management techniques of variable costing and cost-volume-profit analysis with the financial management techniques of leverage analysis and value analysis in order to determine how decisions or changes in inputs w

12、ill affect the shareholder value. The study also introduces the leverage effect of the cost of equity as a new concept and illustrates how it reacts in conjunction with operating leverage and financial leverage to determine the total overall leverage of the company.This new approach would be useful

13、for decision-making purposes in assessing the impact, not only of different decision alternatives, but also of changes in internal factors like production costs or external factors like inflation and tax rates. The findings of this study could be of value to managers at all levels in a business orga

14、nization, but especially to financial managers. Existing shareholders and potential investors would also benefit from the findings of the study, but the company data needed as inputs for the model would not be available to them.In this article EVA, MVA and leverage will be discussed briefly, followe

15、d by an illustration of the development and use of a spreadsheet model to extend the leverage analysis of profits to EVA and MVA. The leverage effect of the cost of equity on EVA and MVA is investigated. The initial hypothesis is that similar to fixed costs and interest, the cost of equity will also

16、 have a leverage effect on the profits (and EVA and MVA) of the business. It should be possible to quantify this leverage effect and to use it, together with the well-known operating leverage and financial leverage factors, to determine the total leverage for the company. Once the total leverage is

17、determined, it would be possible to predict what effect any change in input will have on profits, EVA and MVA. An attempt is made to derive a formula (given certain assumptions) to predict what effect a particular change in volume (sales) would have on EVA and MVA.Finally, the impact of different le

18、vels of operating and financial leverage on profits, EVA and MVA is evaluated.The concepts of EVA, MVA and leverageEVA and MVAA companys total market value is equal to the sum of the market value of its equity and the market value of its debt. In theory, this amount is what can be “taken out” of the

19、 company (i.e. when all shares are sold and debt is repaid) at any given time. The MVA is the difference between the total market value of the company and the economic capital (Firer 1995:57; Reilly and Brown 2003:591).The economic capital, also called invested capital (IC), is the amount that is “p

20、ut into” the company and is basically the fixed assets plus the net working capital.MVA = Market value of company Invested CapitalFrom an investors point of view, MVA is the best final measure of a companys performance. Stewart (1991:153) states that MVA is a cumulative measure of corporate performa

21、nce and that it represents the stock markets assessment from a particular time onwards of the net present value of all a companys past and projected capital projects. MVA is calculated at a given moment, but in order to assess performance over time, the difference or change in MVA from one date to t

22、he next can be determined to see whether value has been created or destroyed.EVA is an internal measure of performance that drives MVA. Stewart (1991:153) defines EVA as follows: “A companys EVA is the fuel that fires up its MVA.” EVA takes into account the full cost of capital, including the cost o

23、f equity. The concept of EVA is a measure of economic profit and was popularized and originally trade-marked by Stern Stewart and Company in the 1980s.The calculation of EVA is the same as that of the well-known “residual income; measure that has been used as a benchmark of divisional performance fo

24、r some time. Horngren, Datar and Foster (2003:790) and Garrison, Noreen and Seal (2003:616) compare EVA to residual income and other performance measures and describe the growing popularity of EVA. EVA is calculated as follows:EVA = (ROIC WACC) ICWhereROIC = Return on invested capitalWACC = Weighted

25、 Average Cost of CapitalIC = Invested Capital (at the beginning of the year)EVA can also be defined as follow:EVA = NOPAT (WACC IC)WhereNOPAT = net operating profit after taxThe link between MVA and EVA is that theoretically, MVA is equal to the present value of all future EVA to be generated by the

26、 company. MVA = present value of all future EVALink between EVA, MVA and leverageIt was indicated that, theoretically, MVA is equal to the present value of all m future EVAS. On the assumption that there will be no future growth in the current EVA, or that the expected future growth in EVA will be a

27、t a constant rate, g, the theoretical MVA can be calculated as a perpetuity. The result shows that MVA is a multiple of the current EVA.EXAMPLE:Company A has a current EVA of R100m. Its WACC is 20%. If no future growth in EVA is expected, the theoretical MVA can be calculated as follows:MVA = PV (fu

28、ture EVA)= current EVA / WACC= R100m / 0.2= R500mIn this instance, MVA is five times the current EVA, or R500/R100m.If EVA is expected to grow at a constant rate of 10% in future, the theoretical MVA can be calculated as follows:MVA = PV (future EVA)= current EVA / (WACC g)= R100m / (0.2 0.1)= R1000

29、mWith the assumption of 10% future growth in EVA, MVA is ten times the current EVA, or (R1000m / R100m). The fact that MVA is theoretically a multiple of the current EVA means that any percentage change in EVA should cause the same percentage change in MVA. If the cost of equity is subtracted from p

30、rofits (after interest and tax), one gets EVA. If one assumes that the capital structure and the cost of equity percentage remain unchanged, the amount debited as the cost of equity in the calculation of EVA is a fixed amount. This fixed amount of the cost of equity also has a leverage effect that c

31、auses EVA (and the theoretical MVA) to change more dramatically than profits when there are changes in the sales volume. The leverage effect of the cost of equity (referred to as EVA leverage) can now be investigated and combined with operational and financial leverage to study the effect on a busin

32、ess as a whole.Research methodA spreadsheet model was developed using different levels of operating leverage and financial leverage. The relationship between profits (after interest and tax) and EVA was determined. This was done by using the cost of own capital (equity) and this fixed amount can therefore be described as a leverage factor for EVA.Furthermore, the EVA leverage factor was combined with the operating and financial leverage. It then became possible to illustrate how the expected percentage change in EVA and MVA can be predicted, given a certain percentage chang