... the sole method of evaluating performance. Methods, such as cost accounting and return-on-investment analysis, no longer deliver the necessary metrics and information to effectively manage businesses. He called his preferred decision-making framework Shareholder Value Analysis (SVA). There is also considerable dissatisfaction with existing accounting-based earnings and return measures. Evidence is mounting that accounting measures such as earnings per share (EPS) and profit or growth in earnings do not take into account the cost of the investment required to run the business. Similarly, return-based measures, such as return on assets, often motivate managers to make short-term dysfunctional decisions that encourage underinvestment. Furthermore, neither earnings nor return measures appear to correlate well with actual market values of companies. Recent accounting scandals, changing circumstances and continuing uncertainty about the economy cause a shift in the direction of the values and purpose that a corporation should seek. While a few great companies have set themselves ...

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