The EVA team converts accounting to economic profit by reversing accounting distortions and measuring the dollar value profit after ALL costs, including the cost of giving shareholders a fair return on their invested capital. Reversing accounting distortions allows EVA financials to also offer a superior basis for calculating consistent valuation metrics. The EVA methodology enables the analysis of a company’s profitability, the decisions management teams make, and the overall company value.
The PRVit Score (Profitability, Risk, and Valuation) is our proprietary 26-factor model that compares the Profitability and Risk of a company’s operations to the Valuation the company trades for in the market. The conversion of accounting to economic profit model is factor agnostic: low-Profitability firms can be as attractive as high-Profitability firms depending on the Value being paid. It generates alpha consistently in backtests across all regions and market caps. PRVit data is updated daily
Along with single-company analysis, the EVA framework can also be used to provide a view on a fund’s exposure to EVA metrics relative to a benchmark to better assess sources of risk and alpha.
Data Feed Details
Economic Value Added (EVA) is an established standard in measuring, analyzing, projecting, and valuing a firm’s underlying economic profit. We convert accounting profit to economic profit by correcting for accounting distortions that exist within as-reported financial statements. With coverage of over 21,000 public companies and data history over two decades, EVA allows investors to parse through thousands of companies globally with comparable accounting adjustments to drive informed investment decision making on a systematic basis.
ISS ESG is the responsible investment arm of Institutional Shareholder Services Inc., the world’s leading provider of environmental, social, and governance solutions for asset owners, asset managers, hedge funds, and asset servicing providers. ISS ESG solutions include corporate and country ESG research, climate data, analytics and advisory, governance data and screening and controversies. For more information, visit iss-esg.com.
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