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Foundations of Economic Value Added, 2nd Edition
 
 
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Foundations of Economic Value Added, 2nd Edition [Hardcover]

James L. Grant (Author)
5.0 out of 5 stars  See all reviews (2 customer reviews)

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Book Description

September 10, 2002 0471234834 978-0471234838 2
An updated look at the role of economic profit analysis in the process of wealth creation
Grant explains the pivotal role of economic value added (EVA) in the theory of finance, how to measure EVA with standard accounting adjustments, how to use EVA to value companies and their stock, and how to use economic profit principles to identify wealth-creating firms, industries, and even market economies.

Frequently Bought Together

Foundations of Economic Value Added, 2nd Edition + EVA and Value-Based Management: A Practical Guide to Implementation + The EVA Challenge: Implementing Value-Added Change in an Organization
Price For All Three: $101.70

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  • EVA and Value-Based Management: A Practical Guide to Implementation $27.09

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Editorial Reviews

From the Back Cover

In the completely updated second edition of Foundations of Economic Value Added, James L. Grant provides a fresh look at the role of economic profit in the process of wealth creation. Whether you’re a manager seeking to create substantial shareholder value, or an investor looking for attractive stock selection opportunities, this comprehensive guide will help you better understand and implement one of the most useful financial tools currently available.

Filled with in-depth insights and practical advice, Foundations of Economic Value Added, Second Edition explores the pivotal role of EVA in the theory of finance and explains:

  • How to measure EVA with standard accounting adjustments
  • How to use EVA to value companies and their stock
  • How to compare EVA with traditional financial metrics (such as ROE)
  • How to estimate the EVA cost of capital
  • How to use EVA to build actively-efficient portfolios
  • How to use economic profit principles to identify wealth-creating firms, industries, and even market economies

Foundations of Economic Value Added, Second Edition shows how the EVA measure can be used as a prism to cast a revealing perspective on individual securities, portfolios, and even macro-economic valuations. If you want to stay up to date on the EVA revolution, this book is for you.

About the Author

JAMES L. GRANT is President of JLG Research, a company specializing in economic profit research, and a member of the finance faculty at Baruch College of the City University of New York. He has published several articles in investment journals including the Journal of Portfolio Management and the Journal of Investing. Dr. Grant is also the coauthor of Focus on Value: A Corporate and Investor Guide to Wealth Creation, and coauthor and coeditor respectively of Equity Portfolio Management and Value-Based Metrics: Foundations and Practice, all from Wiley. He holds a PhD in business from the University of Chicago’s Graduate School of Business.

Product Details

  • Hardcover: 324 pages
  • Publisher: Wiley; 2 edition (September 10, 2002)
  • Language: English
  • ISBN-10: 0471234834
  • ISBN-13: 978-0471234838
  • Product Dimensions: 9.1 x 6.2 x 1.1 inches
  • Shipping Weight: 1.3 pounds (View shipping rates and policies)
  • Average Customer Review: 5.0 out of 5 stars  See all reviews (2 customer reviews)
  • Amazon Best Sellers Rank: #1,295,923 in Books (See Top 100 in Books)

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Average Customer Review
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36 of 38 people found the following review helpful:
5.0 out of 5 stars This book provides readers with an independent view on EVA, January 30, 1999
By A Customer
As a portfolio manager with a major NYC investment firm, it was refreshing to see Professor Grant drill down to the core concepts of EVA and its impact on market pricing. Everyone acknowledges that Stern Stewart has pushed EVA thinking forward in the corporate world but Professor Grant takes it further and shows how EVA gets priced into securities on a day-to-day basis.
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5 of 5 people found the following review helpful:
5.0 out of 5 stars Go beyond earnings, and into value-based metrics, December 5, 2004
By 
This review is from: Foundations of Economic Value Added, 2nd Edition (Hardcover)
I took a few courses with Professor Grant at the University of Massachusetts Boston, where this was one of the required texts. I must say his courses and his texts has turned out to be most valuable and useful during my final years as a student of undergraduate finance. All of his texts were reader-friendly and insightful.
Dr. Grant uses active companies in the stock market (GE, Dell, IBM) and their historical data to determine whether they are creating or destroying wealth for their shareholders and bondholders using value-based metrics like eva.
His calculations in this book were especially easy to follow and understand - students of finance can relate with me if you have read some of those cryptic finance texts.
I would highly recommend Dr. Grant's text to all students. And if you are a UMass Boston student, you should take his course.
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Inside This Book (learn more)
First Sentence:
In a market-driven economy many companies will create wealth. Read the first page
Key Phrases - Statistically Improbable Phrases (SIPs): (learn more)
cumulative restructuring charges, standard accounting adjustments, capital generation rate, fundamental stock return, estimated enterprise value, economic profit measurement, warranted stock price, unlevered net operating profit, discounted positive economic profit, profitability index ratio, positive residual return, wealth destroyers, traditional free cash flow model, cash operating taxes, equity reserve accounts, largest wealth creators, anticipated future assets, economic profit perspective, free cash flow estimates, implied interest expense, accumulated goodwill amortization, economic profit improvement, debt tax subsidy rate, net invested capital, levered stock
Key Phrases - Capitalized Phrases (CAPs): (learn more)
Performance Universe, Fix-It-Yourself Company, State Street, Value Line, General Motors, New York, Cisco Systems, General Electric, Stern Stewart, Microsoft Corporation, Fabozzi Associates, New Hope, Bennett Stewart, Journal of Portfolio Management, John Wiley, Lucent Technologies, Securities Market Line, Clinton Presidency, Dow Industrials, General Manufacturing, Gordon Growth Model, Intel Corporation, Owens Corning, Reagan Presidency, Diversified Financials
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