Insert Exhibit3 about here
Stern Stewart’s Economic Value Added (EVA) and Market Value Added (MVA) models receive strong acceptance and use despite the relative youth of the methods. Stern Stewart argues that EVA is the financial performance measure that comes closer than any other to capturing the economic profit of an enterprise. They define EVA as the difference between a firm’s net operating after tax income and the cost of capital while MVA is a cumulative measure of wealth creation. EVA was used by over half of the respondents while MVA was used by approximately one third.