SVA

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August 31, 2024 5 min read Definitions

Shareholder Value Analysis: Understanding Business Valuation

Finance Investments Shareholder Value Analysis SVA Valuation Net Present Value Financial Management

Shareholder Value Analysis (SVA) is a method for valuing the entire equity in a company by assessing the net present value of its future cash flows, discounted at the appropriate cost of capital. This method was developed by Alfred Rappaport in the 1980s and focuses on recognizing the time value of money to provide a more dynamic perspective on business value compared to traditional financial accounting.