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Technology Stocks : Creative Labs (CREAF)
CREAF 0.370-21.3%Oct 31 1:10 PM EST
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To: Marc who wrote (13642)4/12/1999 1:37:00 AM
From: Andy Chong   of 13925
 
[Excerpt from today's Singapore Business Time]

KPMG study breaks with conventional practice to focus on shareholder value
By Anna Teo

[SINGAPORE]

... The just-completed study by KPMG Consulting looks at corporate performance based on the concept of "economic profitability", which has market value-added (MVA) and economic profit (EP) as its two key indicators.

Unlike conventional measures like earnings per share (EPS) and net profit, MVA and EP take into account the cost of capital, and therefore the opportunity cost of capital invested in the business. The basic idea is that a company must make enough money for its shareholders to at least cover their cost of capital.

A company is said to have created value if its MVA -- or its market value after deducting all the capital that investors have sunk in -- is positive. Conversely, negative MVA implies long-term value destruction.

Topping the list of value creators was Singapore Press Holdings, with the highest MVA and EP, followed by Cerebos Pacific, Creative Technology, Want Want Holdings and Rothmans Industries. The top five companies accounted for two-thirds of the total value created by the 85 companies in the study...

From business-times.asia1.com.sg
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