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The Value Driver Tree

About a century ago, Du Pont created a metric concept called the value driver tree, which splits value-based metrics such as EVA and ROI into their sub-metrics to show the source of the value added.  Value drivers include measures of growth, margins, capital efficiency and leverage.

You can now use the value drivers from the value driver tree in the Obermatt Stock Screener for better stock investing decisions.

The original value driver tree for non-financial institutions is based on the assumption that financing is not part of operating the business.  If financing is part of business operations, as in banks and insurance companies, the value driver tree for financial institutions is used.

Click here for the Financials Value Driver Tree.

Click here for Value Driver Tree metric defintions.

Click here for the section on value based executive compensation.

Click here for the Obermatt stock screener based on value drivers

Recommended Readings: EVA by Stephen F. O'Byrne, Competitive Value Management by Hermann J. Stern

Value Driver Tree Non-Financials

Value driver tree for non-finance comanies (entity method = invested capital is equity plus net debt)