This podcast features the second installment of our LinkedIn Live series on how economic profit drives long-term value creation. Fortuna partners Greg Milano and Marwaan Karame discuss how Residual Cash Earnings (RCE) improves upon earlier economic profit models—most notably EVA. Greg shares how his experience with EVA, and later with Credit Suisse’s HOLT framework, led him to identify a key flaw: depreciation was distorting performance, encouraging companies to “sweat assets” and underinvest. RCE treats depreciation differently, restoring the incentive to invest appropriately. Importantly, RCE is also simpler to use and implement, requiring far fewer adjustments than EVA. Research shows that these improvements lead to RCE tracking better with shareholder returns, which means a stronger alignment between the interests of management and long-term investors.