PricewaterhouseCoopers created its Shareholder Value Index for three key auto industry sectors: suppliers, automakers and US auto retailers.
The index is similar to the Standard & Poor's 500 Composite Index. Each index is calculated by average total shareholder returns for a basket of publicly traded companies in that sector. The average is weighted by market capitalization. Market capitalization is the value of a company's share price times the number of shares outstanding.
In this way, the performance of the companies with larger market capitalization has a greater impact on the index.
Each company's total shareholder return is measured by taking account of the movement of its share price, stock splits and stock buybacks as well as reinvestment of any cash dividend.
PricewaterhouseCoopers also adjusted the returns for overseas companies to take into account currency movements so that all returns are expressed in a consistent currency.
