Can a business that makes good money still be losing value?
This is a question many entrepreneurs and investors overlook. Yet, the answer can be the dividing line between a thriving, wealth-building enterprise and a slow, silent drain on your capital.
Here’s the truth: a company can post solid profits year after year and still be destroying value.
How?
Because it’s not earning enough to cover the real cost of the capital it uses—the money, assets, and time it takes to keep the business running.
This is where a powerful concept steps in: Economic Value Added (EVA).
So, what is an EVA?
EVA = Real Profit – Cost of Capital
Think of it as the “bottom-bottom line.”
EVA measures how much profit your business makes AFTER accounting for the cost of using its resources—not just interest and expenses, but every dollar tied up in inventory, equipment, real estate, or even your own capital.
If EVA is positive → You’re creating value.
If EVA is negative → You’re quietly losing money even if you’re “profitable” on paper.
A Simple Example: Two Lemonade Stands
Both stands are technically “profitable” but only Stand A is creating value. Stand B is eroding it.
EVA shows us that profitability ≠ value creation.
CSX and the Power of Capital Discipline
CSX Corporation is one of America’s largest freight rail companies, moving everything from coal to consumer goods across the eastern U.S.
But in the late ‘80s and early ’90s, despite its massive scale, CSX was struggling. On paper, it looked profitable, but under the hood, the business was bloated with underutilized assets and inefficient capital use.
Before EVA:
- They used 4 locomotives for a route
- They tied up millions in equipment that sat idle
After EVA:
- Switched to 3 locomotives
- Cut idle equipment
- Boosted return on capital
Stock price tripled
By adopting EVA principles, they streamlined operations, reduced idle equipment, and enhanced efficiency and turnaround times.
CSX witnessed a significant uptick in stock value.
What CSX Teaches Us
Wealth goes beyond accumulation. It’s also about preserving capital and deploying it efficiently. CSX adopted EVA to shine a light on where capital was being drained without return.
Key Insight: Just like CSX, you may be “profitable” on paper but still hemorrhaging capital. EVA helps uncover that hidden loss.
Infinite Banking and the CSX Mindset
What CSX did at scale is what Infinite Banking allows you to do personally.
With IBC, you manage your own capital system.
You decide where your money flows, how quickly it turns over, and whether it’s producing more than it costs.
Until you track the cost of your capital, you’re flying blind. IBC gives you visibility, flexibility, and control.
Coca-Cola and Why Thinking Like an Owner is a Game-Changer
Coca-Cola, one of the most recognizable brands on the planet, faced a similar issue in the 1990s. Their profits looked strong, but billions were tied up in owning bottling plants and infrastructure. Capital was stuck, and returns were underwhelming.
Then came the shift. They applied EVA and did the following:
- Outsourced low-return operations
- Focused only on products and projects that beat their cost of capital
- Saw their return on capital surge to 27%, while cutting overall investment needs
Lesson from Coke: They didn’t need to sell more soda. They just needed to be sharper with how their money was used.
Infinite Banking and the Coca-Cola Mindset
Entrepreneurs often keep their capital trapped. In equipment, inventory, or the bank.
But with Infinite Banking, you create a flow system where your dollars can work in multiple places, just like Coke’s best-performing assets.
It goes beyond making money. It’s how many times your dollar can move through your system and earn value at every turn.
But Why Should This Matter to You?
Whether you’re building a business, investing, or simply trying to grow generational wealth, EVA can:
- Reinforce a mindset of capital stewardship—essential for long-term success
- Reveal which parts of your financial system are creating or destroying value
- Help you prioritize high-return activities and investments
Final Thought
EVA is a language big, successful companies understand.
It shows you where money is working hardest and where it’s dying quietly.
It’s the same lens you need when building your own privatized banking system through Infinite Banking.
Because whether you’re leading a billion-dollar enterprise or managing your personal economy, one question always matters:
“Is my capital creating more than it costs me?”
When you can answer that with clarity and confidence, you stop playing defense and start building real, sustainable wealth.
Ready to see how EVA and Infinite Banking could reshape your financial strategy?
Let’s talk. Schedule a no-obligation personal introduction to have your questions answered.
We’ll walk through how to assess your capital flow and explore strategies to make your money work smarter, not harder.