Valmont Industries, Inc - The Case Centre

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Case

Reference no. UVA-F-1191

Subject category: Finance, Accounting and Control

Authors: Kenneth M Eades (Darden School of Business, University of Virginia); Jay Caver (Darden School of Business, University of Virginia); Jennifer Hill (Darden School of Business, University of Virginia)

Published by: Darden Business Publishing

Originally published in: 1997

Version: 02.2011

Revision date: 2-Jun-2011

Length: 20 pages

Data source: Field research

Topics: Financial policy; Financing capital investments; Economic Value Added; Value-based management

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Abstract

This case serves as an introduction to the concept of economic value added (EVA). The student is placed in the position of Valmont's CFO to decide whether EVA can live up to its promise to motivate managers to act like shareholders and ultimately lead them to make value-enhancing decisions that can reverse Valmont's weak earnings and lackluster stock-price performance. The case works best if students are acquainted with the concepts of cost of capital and net present value. The teaching note that is available for registered faculty explains how to incorporate the accompanying six-minute video supplement.

Industry:

Construction/materials