Date: Thu, 18 Dec 1997 01:49:54 GMT
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SPX Corporation -- How to improve EVA
WHAT CAN I DO?
Invest capital where increased operating profits will more than cover the charge for additional capital.
Growth includes new products or expanding into new markets where profits cover any additional investment. But growth also means sharing best EVA improvement practices.
Improve operating profits without using additional capital, or reduce capital while maintaining or increasing profits.
The EVA mindset challenges all SPX people to look for ways to improve the way they complete their jobs each day. Success under EVA requires continuous improvement.
Withdraw capital from operations that cannot generate operating profits greater than the cost of capital and reallocate it to activities that improve EVA.
When an activity is not creating EVA improvement and cannot be changed so that it does, the activity must be stopped and the capital reallocated. When considering reallocation, the impact on other areas of the business must be weighed.
EVA is a registered trademark of Stern Stewart & Co.