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## Value-Based Management 

Only those who earn a rate of return above their cost of capital will succeed in achieving a sustained increase in corporate value. In keeping with this principle, PUMA has implemented a system of value-based management. 

## Value Contribution 

The measurement of return on capital is based on the cashflow return on investment (”CFROI“), which, in simplified terms, is calculated as the gross cashflow divided by the gross investment base. The gross investment base is the total amount of available funds and assets before accumulated depreciation and amortization. 

## Calculation of CFROI and Value Contribution 

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<img src='content_image/50522.jpg'>

The absolute value contribution corresponds to the difference, multiplied by the gross investment base, between the return on capital (CROI) and cost of capital (WACC). A positive value contribution is earned when the return on capital is greater than the cost of capital. 

