COVID-19 will markedly change business. It’s an unprecedented force of economic disruption that is slashing demand and imposing new workplace habits, sourcing strategies, and consumer behaviors. Companies are only beginning to size up and respond to the new world we are facing.
The goal of this paper is to explain what makes EVA the right metric to drive decisions in the wake of COVID. By working through a series of cases and simple numerical examples, we will demonstrate how EVA handles write-downs and restructuring charges, and R&D and divestitures. The examples will give boards and senior executives a better understanding for how EVA will objectively evaluate corporate performance and deliver deeper insights compared with conventional financial measures.