How EVA helps investors to search bottom line?

   EVA (economic value added) is a assessment tool to measure a firm's financial performance and to motivate its management as well. The key reasons why firm may use EVA in addition to the standard accounting measure (e.g., GAAP) are due to the disagreement between an investment's net operating income or profits after taxes and the cost of fundings (e.g., EVA = Net operating profit after taxes – Capital x cost of capital) ( EVA, 2009). EVA not only shows true profits and gets a more true assess than just profits, and increased correlation with stock price than only gets earnings per share (EPS). EVA not only takes the total cost of capital ( equity and debt capital both, and not cost of debt or interest expense. EVA considers R & D as a capitalized expense on future development and not as a term expense only. Therefore as EVA value increases that also means stock value may follow—all these would help and improve overall performance. Companies uses EVA put more on allocating assets and not accounting profits only—it would intensify the development of new goods even it decreases present earnings (Gitman, 2009). In all, EVA tries to capit the real economic profit of an organization.

     Erik Stern, president of Stern Stewart & Co., that developes EAV, and claims the most challenge to take and apply EAVis to change organizational compensation structures. EVA “seeks to measure the extent to which companies create value above the cost of capital. But most compensation structures are driven by budget considerations, or worse, by negotiation and politics, and do not hold employees accountable for the capital they are entrusted with.” (Cua, 2006, p.1). The aim of EVA is to create a standard of value creation for all stakeholders and investors. Staffs must care for capital cost or expense as if they are their own money. A upward of EVA shows the management is creating value or a downward means the firm is losing its purpose or direction—a basic standard of business operation for many many hundreds of years, East or West. Employees must think and act just like owners—for those want to open a new venture, or self-employed, EVA is the first and basic tool.

References

Economic valued added (EVA). (2009). Dictionary of accounting terms. Retrieved

     March 8, 2009, from http://www.answers.com/topic/economic-value-added

Cua, G. (2006, August 28).  When pay structures become hurdles; they get in the way of

     firms adopting wealth-added mindset: Stern. The business times Singapore.

     Retrieved March 8, 2009, from LexisNexis Academic database

Note: All the above articles or writings are copyright (c) 2009 & all rights reserved.

Welcome to CAC Economic & Business Consulting International.
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Donation & Charity: We need your help

Educating Farm Youths of Rural Areas (EFY)
     
       Education is every one's right, especially those poor farm youths in rural area in Asia, Africa, and South America at this inter-sectional period between “have and have-not,” as the gap between high and low income families is widening than before. The funding for educating farm youths will focus on farm youths in rural area who are ready (and have already passed university examinations) to enter universities in their home countries but due to a lack of public or institutional support, and no funding or finance offer to them at all.  At the same time, there are limited or not enough income from their families due to a serious of loss in farming, natural disasters, unemployment, lay-off, or sick and illness. Our funding will present and put forward to them as one last opening or chance.      
       Our mission:  Let education equips them with knowledge, competence and skills they need to achieve and fulfill their potential, and to safeguard them or they may help others as well in the future. The value of education results in enormous benefits for the farms and the public. Education is vital and necessary to the development of every society. Yet, the education of farm youths in these nations are far too frequently neglected and left behind, and as this remains, such advancement will not be achieved. 
     
       Method: All donations will go directly to the farm youths’ university educational funds with (a) student background check, (b) individual interviews, and (c) signed study agreements. We will select the most needed farm youths to share the yearly donation funding and will inform and make public notice regularly in:
http://educatingfarmyouths.webs.com/

       Please send your check/cheque or money order, $30, $50, $100, or any amount to our "ON Society for Educating Farm Youths," 730 Gerrard Street East, Toronto, Ontario, Canada, M4M 1Y3.  Thank you for your support.             
     We welcome individuals, volunteers, Web-designers, accountants, lawyers or any professional to join our team, please email: [email protected] 
EFY Executive Committee Chair

捐款&慈善:需要你的帮助
农村青年人教育项目
       接 受教育是每个年轻人的权利,尤其是那些中国农村贫困地区中处在接受和没有教育的中间地带的年轻人。 这个青年农民教育基金首要集中在那些已经预备好要进入中国大陆大学和已经通过大学考试的学生,但是由于他们的家庭因为意外损失,低收入,失业,疾病而没有 资金供应他们的教育费用。教育是能够装备他们所需要的的专有技术,知识,专长来发挥他们潜在的能力以保护他们的未来,或者他们可以在未来帮助其他人。教育 的价值会产生巨大的农民个人和公共利益。教育对每个社会的发展非常重要。然而中国的青年农民的教育已经落后,如果这种情况不改变,很难达到社会的进步。 所有的捐款将直接进入青年农民大学教育费用。对于资助对象,要进行背景调查,个人面试,签订学习合约。我们将会每年选择最需要的学生得到资助,并且在网上公,布http://educatingfarmyouths.webs.com/
如果你愿意资助,请签发$30, $50, $100或者任何金额到下面的地址:"ON Society For Educating Farm Youths," 730 Gerrard Street East, Toronto, Ontario, Canada, M4M 1Y3. 
谢谢你的全力支持和帮助。
农村青年人教育项目
执行委员会主席

What is about critical writing?
        We all understand critique, comments, or criticism may lead some individuals or groups feel uneasy, or tensions, especially those nonconstructive ones, however, as long as critique and comments are facts, truths, and realities (with not fiction, and dishonesty), they are parts of analysis or understanding, assessment, evaluations, examinations, studies, learning processing and appreciation. Critical writing (not "statement" writing) or critical path analysis (CPA) is very important in our education,  academic freedom, leadership, intellectual skill, knowledge, intelligence, and thinking. How do you make a good judgment or improve your understanding if you are not hearing or recognizing the other sides of stories. You should get more information,  viewpoints or opinions from different people, sources or as many as possiable and then make a objective analysis, criticism, or examination. If you don't hear or consider others' opinions, suggestions or standpoints, how will you understand the issues or step forward, advance yourself, and work with others? Overall, we should view and treat critique, comments, and criticism with open-minded, and positive or constructive mindset as much as we can. Just like most people or individuals with positive thinking that treat risks, falls, failures, breakdown, collapses, crashes, catastrophes, or fiascoes as opportunities, chances, breaks, and opening.  Overall, critical writing, we sincerely believe, may create debates, attentions, ideas, innovation, intelligence, new directions and even better living standards-- as long as we respect and accept others (even we do not agree each other) with
open-minded, and not homogeneous or convergent thinking.  For further study of critical thinking skills, please read:
Celuch, Kevin, Slama, & Mark. (1999, Jan./Feb.). Teaching critical thinking skills for
       the 21th century: An advertising principles case study. Journal of education
        for
business, 74 (3). [EBSCOhost: Business source elite database].
Vacek, Jenny, (2009, Jan.). Using a conceptual approach with concept mapping to promote critical thinking. Journal of nursing education. 48 (1). [FirstSearch    database].
       Last but not least, we will present more new data, knowledge, business tools to share with you, so visit us whenever you can or bookmarks this page. The last web-page of "Share ideas & Blog" is the heart of this site and we will keep updating as much as we can. So please drop in often, and always welcome your comments.  Thank you.  See you there!
CAC International.

Note: Copyright (c) 2009 & All rights reserved.
New venture:
Digital & Wireless Written Records Incorporation is looking for investors and business partner.
    Organizational communication and trust between managers and employees, or in any business management, relationship, and leadership are very important issues. In the matters of interpersonal trust in supply chain management and communication, Huang, Gattiker, and Schwarz (2008) analyze and find out, “When email is used, interpersonal trust formation is greater in high complexity situations than in low complexity situations… With email, negotiators gain several features… [For examples,] email produces a written record of the agreement. It also produces a log of how the agreement was reached” (p.1). It is very true. Even now we are living in a digital age with high-tech and wireless; we still need and trust a written record. Digital & Wireless Written Records Inc. is the new company that we just set up. Welcome investors to join our new venture! Please email to us: [email protected]
Thanks.
References

Northouse, P. G. (2007). Leadership (4th ed.). Thousand Oaks, CA: Sage.
Huang, X., Gattiker, T., & Schwarz, J. (2008, July). Interpersonal trust formation during the
supplier selection process: The role of the communication channel. Journal of supply chain
management, 44(3), 53-75. Retrieved May 10, 2009, from First Search database.
Upturn:
How does leadership differ from management?
       Leadership and management are entirely diverse and not the same aspects; however they are linked, and complementary. Northouse (2007) analyzes, “leadership is a process that is similar to management in many ways. Leadership involves influence, as does management. Leadership entails working with people, which management entails as well. [And] leadership is concerned with effective goal accomplishment, and so is management” (p.9). Nevertheless, leadership is dissimilar from management. While the wisdom of leadership can be found in Confucius (e.g., emergent leadership from insight, ideas, reason, or innovation), or Qin Shi Huang (both assigned, or "status", power, and emergent leadership), the king who built the Great Wall and united the nation, or can be followed to Plato, or Aristotle (both were emergent leadership and emerged over a period of time via  communication or initiating new concepts and visions); on the other hand, the notion of management just came forward in the twenty century of industrialized world to help organizations manage more effectively and efficiently (e.g., creates and constructs order and consistency), such as planning, budgeting, organizing, staffing, controlling and problem solving (Northouse, 2007). 

       In the features and functions of
leadership and management, Murray (2009) examines and argues they must work together and achieve better results, for examples, “the manager’s job is to plan, organize and coordinate. The leader’s job is to inspire and motivate… The manager administers; the leader innovates. The manager is a copy; the leader is an original. The manager maintains; the leader develops. The manager focuses on systems and structure; the leader focuses on people. The manager relies on control; the leader inspires trust. The manager has a short-range view; the leader has a long-range perspective” (p.1). In general, leadership creates and makes change and movement; it establishes direction (e.g., creates a vision, clarifies big picture, and sets goals and strategies); it aligns and supports staffs (e.g., communicates objectives, seeks commitment; and builds teams and coalitions); and it motivates and inspires people (e.g., encourages and energizes others, empowers employees, and satisfies unmet needs) (Northouse, 2007).    
      Overall, leadership “is a process (e.g., a transactional experience or happening, and not a trait or characteristic, that takes place between the leader and her or his adherents with an interactive outcome, such as leaders need followers, and followers need leaders, and it opens to every person) whereby an individual influences a group of individuals to achieve a common goal” (Northouse, p.3). However, the ideal leaders are not exceeding or on top of followers or supreme than followers, Northouse (2007) argues, leaders must “have an ethical responsibility to attend to the needs and concerns of followers… Leaders and followers must be understood in relation to each other and collectively” (p.4). In other words, great leadership must take responsibility and open communication, and preferably leaders and followers are in the leadership relationship together (e.g., interaction).
      To be effective, organizations require both capable and knowledgeable management and skilled or inspired leadership. To manage well represents “to accomplish activities and master routines, whereas to lead means to influence others and create visions for change” (Northouse, p.11).  In all, leadership is an influence process that helps group of people toward a common objective. Management emphasizes the producing order and reliability, whereas leadership is about adaptation and creating change and movement. Successful leaders have to be able to differentiate and recognize the really significant decisions, and achieve a better result.  As Warren Bennis examines and argues, “[this is the heart of great leadership, especially now when so much is changing so quickly… What led to the subprime meltdown (and financial crisis worldwide) was a manic denial of good judgment because there were warning signs everywhere]” (Hymowitz, 2007, p.1). There are why many successful leaders or organizations with great leadership and business ethics (e.g., Procter & Gamble, McDonald’s, and Wal-Mart) are doing so well, and maintaining their moral judgment, leadership, and management that all become blue chip stocks even in this slow economy.
References
Northouse, P. G. (2007).  Leadership theory and practice (4th edition). Thousand Oaks, CA: Sage.
Hymowitz, C. (2007, December 17). Companies need CEOs to stop  
       spinning and start thinking. Retrieved April 30, 2009, from
       http://online.wsj.com/articleSb119784929145132573.html
Murray, A. (2009, May 1). What is the difference between management
        and leadership?   Retrieved April 30, 2009, from
        http://guides.wsj.com/management/developing-a-leadersp-style... 

How cook was our credit rating agencies?
       The traditional pay system and the conflict of interest between credit rating agencies and investment or financial organizations are too much or too many and too long--this is why all these big name agencies openly give or promote their rating of organizations or investment products to gain their statuses in the market and so they can get higher pay or returns --e.g., almost doubled earnings from $3 billion in 2000 to more than $6 billion in 2007 (Waxman, 2008 ). I wonder after all these hearings of the financial crisis, if credit rating agencies did not change their organizational structures and cultures, how many investors will trust or buy their recommendations or rating any more. In order to increase investment in financial market, they must take action to get rid of conflicts and improve business ethics immediately. The credit rating industry must keep a higher standard and opening communication (e.g., disclosure all  interests) with self-controlling or disciplining, accountability, and liability.
References:
Gitman, L. (2009). Principles of managerial finance (12th edition).
Boston, MA: Prentice-Hall.
Waxman, H. (2008, October 22).  Committee holds hearing on the credit rating agencies and the financial crisis: Chairman Waxman’s opening statement. Retrieved February 19, 2009, from http://oversight.house.gov/story.asp?ID=2255
All copyright (c) 2009 & all rights reserved.



How good is a CFO?

     Procter & Gamble (P&G) which is incorporated in 1890 and is located in Cincinnati, Ohio—it is the world’s number one producer and marketer of household products with many billion-dollar brands (e.g., Tide, Gillette, Pampers, Head & Shoulders, Olay, Wella, or Duracell). As it expands into the international markets, the major objectives of its CFO and the organization are: “a) Interface with customers to ensure that marketing plans fully capitalize on local understanding, to seek synergy across programs to leverage corporate scale, and to develop strong programs that change the game in…favor at point-of-purchase; b) provide services and solutions that enable the company to operate efficiently around the world, collaborate effectively with business partners, and help employees become more productive; and c) Ensure that the functional capability integrated into the rest of the company remains on the cutting edge of the industry” (P&G, p.1). All these match the aim and motto of the company: “Think globally and act locally” (P&G, p.1).  In all, increasing the cost efficient and effective, and the values of its stakeholders, and improving the market shares, customer services, and the management and financial excellence are the concerns or apprehensions of a CFO might face as a firm expands into the international markets.  

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