EVA: Improving Employee Performance

Introduction Maximize the shareholders profit is the aim of all companies, despite the natural of the organizations or the size, by increasing the company share and directed all activities to that goal (Groth, et. Al., 1996), through performance measure tools.
Q1 A : The definition of EVA and its advantages and disadvantages will be discuss.
Traditional accounting based performance measures is not given a real picture of the organization performance (Biddle, et;al.1997), therefore there is a need to come with new measure tool which give the real financial performance of the company.
EVA is تعريف
EVA can be achieved through Economic Profit(EP) which is called as EVA as Stern and Stewart identified (A Ehrnbar, 1998), which

In conclusion EVA does not dominate earnings with stock returns for XYZ company in five years period of study.

Q1C: The important of weighted average cost of capital (WACC) and who set the WACC will discuss. WACC is widely used by financial analysis to evaluate the future project of the company. Normally, WACC used to computing the cash flows to a company on future project to discount cash flow in the present value. WACCis a calculation of organization's cost of capital in which each category of capital is proportionately weighted.
The importance and usefulness of WACC, as a financial tool for investor and firms is well accepted among the financial analysts.
During making financial decisions, managers are assumed to have a target capital structure in their mind according to the relative propations of equity, preference shares and loans may vary .
The cost of capital is decided by investors to make investment decisions and evaluate projects with similar and dissimilar risks. Calculation of important metrics of appraisal like net present

In other study (Stephen & Bertunek,1997) found ROE , EPS and revenue growth can be adjusted by changing the accounting methods or capital structure. (o' Byrene,1996) conclude revenue explane only 24% of the change in firms market value. (Ismai,2006) found NOPAT and net income they are supiror than EVAand Residual income in explane chane of stock value.The firms using EVA they are not have advantage over the one who does not(Paliam,2006), which is absotuley opposite the study of O'byrne,1996, which refect EVA explane the value share and the company profit.
The firms that use EVA that earning per share better that other(Athanassakos,2007)
Conclusion :
.In my opinion its not recommended to relay on EVA only as index in stock investing according to studies in some firms EVA dominates earnings in information content, while in other company it does not work. It obvious to styudy other factor like infition, individual income and GDP which may have desion through invested in stock market.
(Paulo,2003) confirm that if the organization want to acheiave the financial goals on stuck returns the need to focus on both financial and non financial perspective