CVA (Cash Value Added) is a cash flow based concept for strategic investment analysis. The concept is based on a combination of grouping of investments (the specific focus on major Strategic Investments) and the value creation over the life cycle.

CVA was developed by Erik Ottosson and Fredrik Weissenrieder (www.weissenrieder.com) during the 1990-ies for internal analysis of cash flow and value creation at the Swedish multinational company SCA (www.sca.com).

In 2001 PricewaterhouseCoopers  ranked CVA as one of four share holder value metrics: “CVA is useful for examining the impact of strategic and non-strategic investment on corporate value”[1].

The CVA concept and CVA software tools has been used in a variety of industries, with clients such as SCA, Vattenfall, Capio, JM. The total value of assets being analyzed with the CVA concept is estimated to exceed US$ 500 billion.

The theoretical foundation for CVA is similar to the CFROI (Cash Flow Return on Investment) model developed during the 1970-ies by HOLT Value Associates. CFROI was primarily developed for equity evaluation in the stock market based on external financial information. CFROI and a CFROI-derived CVA-metric has been used by e.g. Boston Consulting Group  (www.BCG.com) .