Question

Lohmann Corporation is a major supplier to makers of outdoor power equipment. According to the company’s annual report, “management subscribes to the premise that the value of our company is enhanced if the capital invested in its operations yields a cash return that is greater than that expected by the providers of capital.”
The following data are from Lohmann’s annual report that incorporate EVA adjustments to operating profit and average invested capital (amounts in thousands):


1. Compute the EVA for Lohmann for 20X1 and 20X2.
2. Did Lohmann’s overall performance improve from 20X1 to 20X2?Explain.


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  • CreatedNovember 19, 2014
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