Mia, do you have a second to help me with my reading of Atherton’s annual report? I’ve come across several unfamiliar terms, and I want to make sure that I’m interpreting the data and management’s comments correctly. For example, one of the footnotes to the financial statements uses "the book value of Atherton’s shares," and then in another place, it uses "Economic Value Added." I’ve never encountered those terms before. Do you know what they’re talking about?

THE BOOK VALUE of assets and shares are the value of these items in a company's financial records. The book value per share is a market value ratio that weighs stockholders' equity against sharesoutstanding. In other words, the value of all sharesdivided by the number of shares issued.

Book value of an asset refers to thevalue of an asset when depreciation is accounted for.

ECONOMIC VALUE ADDED (EVA) is an estimate of a firm'seconomic profit, or the value created in excess of the required return of the company's shareholders.

Economic Value Added (EVA) is important because it is used as an indicator of how profitable company projects are and it therefore serves as a reflection of management performance. It includes the balance sheet in the calculation and encourages managers to think about assets as well as expenses in their decisions.