scholarly journals A Fresh Look At Economic Value Added: Empirical Study Of The Fortune Five-Hundred Companies

2011 ◽  
Vol 18 (2) ◽  
Author(s):  
Adnan M. Abdeen ◽  
G. Timothy Haight
Keyword(s):  
Performance Evaluation ◽  
Value Creation ◽  
Economic Value ◽  
Value Added ◽  
Business Environment ◽  
Economic Value Added ◽  
Generally Accepted Accounting Principles ◽  
Business Executives ◽  
And Performance ◽  
The Many

Rapid and complex changes in the economic and business environment are posing serious challenges to today’s business executives. Meeting these challenges requires effective measures for control and performance evaluation. This article focuses on the uses, benefits and limitations of economic value added (EVA) as a value creation measure. Calculation of this trendy measure is complicated because of the many adjustments needed to convert the generally accepted accounting principles (GAAP) based income to economic income. The article compares the performance of EVA user companies with non-user Fortune 500 companies for the years 1997 and 1998. It shows that users performance means profits as percentage of revenues, assets, and stockholders’ equity were higher than the means of non-users. However, the means for 1998 earnings per share (EPS), EPS change from 1997 and EPS growth for the years 1988-1998 were lower for the EVA user companies. EVA will become less popular in its use as an instrument of control and performance evaluation. Therefore, the conclusion of this research is not in support of EVA use as a measure of value creation to stockholders.

How to Evaluate the Economic Value Added of Innovative Interface Technologies in a Booming Cyber Commerce Environment

2011 ◽  
Vol 467-469 ◽  
pp. 1006-1011
Author(s):  
Ming Yuan Hsieh ◽  
Chung Hsing Huang ◽  
Wen Ming Wu
Keyword(s):  
Factor Analysis ◽  
Customer Service ◽  
Economic Value ◽  
Value Added ◽  
Business Environment ◽  
Economic Value Added ◽  
Social Community ◽  
Priority Vector ◽  
Network Process ◽  
Four Levels

Beginning in the 21st century, e-business enterprises need to take vigorous tactics in facing greater challenges in a booming cyber commerce era. In today’s e-business environment, innovative interface technologies change with each passing day, customers’ (users’) satisfaction are more and more discerning, and market demands can fluctuate unpredictably. While facing constant changes in the lower-profit and high customer-service cyber commerce environment, it is important to know how to break through the current Information Technology (IT) industrial situation, maintain the enterprises’ owned advantage and continuously make a profit under a booming transition. In this research, nineteen sub-criteria are categorized into five factors (criteria) by the measurement of factor analysis. Three basic types of innovative business websites (portals, cyber commerce and social community) in an e-business environment are then evaluated by nineteen assessable criteria of five characteristics of innovation interface technology through the use of the Analytical Network Process (ANP) approach. The specific feature of the ANP model is to establish a pairwise comparative matrix and furthermore, to calculate the priority vector weights (eigenvector) of each assessable characteristic, criteria and sub-criteria. The factor analysis can utilize more measure matrix to benefit the deviation of ANP approach due to less data from expert’s opinions. Additionally, in the content, the analytical hierarchical relations are definitely expressed in four levels among each characteristic of innovative interface technology (IIT), criterion and sub-criteria. Moreover, based on the empirical analysis, the enterprises are able to choose the best potential business website with highest economic value added (EVA) through this research in order to maximize financial profits and benefits from an innovative perspective. Finally, some suggestions for managers and researchers are inductively formed to further determine the best development of innovative interface technologies in a thriving cyber commerce environment.

scholarly journals Liquidity and the Performance of the Nigerian Manufacturing Firms: an Economic Value-added Approach

2021 ◽  
Vol 17 ◽  
pp. 47-55
Author(s):  
Olusegun Osho ◽  
Alexander Ehimare Omankhanlen ◽  
Mojisola Fasanmi ◽  
Victoria Akinjare
Keyword(s):  
Manufacturing Industry ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Economic Sectors ◽  
Manufacturing Firm ◽  
Development Indicators ◽  
And Performance ◽  
The Impact

Considering the possibility of finding a gap and a room for improvement, so much have been written about liquidity and performance. Notwithstanding, the emphasis has been on profitability as a yardstick for performance and little has been done on other areas of performance measurement. The emphasis has also been more on various economic sectors with the exception of the manufacturing industry. This paper intends to look at the impact, if any, of liquidity provision and availability on Nigeria’s manufacturing firm’s performance from the perspective of Economic Value Added (EVA). Economic value-adding is beyond just profitability or liquidity. The firm's value to the stakeholders, its sustainability and long-term values are defined. The study would apply liquidity theories, profitability and the economic value-added theories as it applies to a manufacturing firm in a developing economy like Nigeria. On its methodology, the article data is obtained from the World Bank’s World Development Indicators-WDI and then a regression analysis will be run on the data using the SPSS software and then an analysis of the results of the regression. The last section of the article would conclude and make recommendations from the study outcome and the empirical analysis with respect to the theories.

Analyzing the Impact of the COVID-19 Pandemic on Value Creation

2021 ◽  
pp. 153-173
Author(s):  
Rosa Galvão ◽  
Ana Bela de Sousa Delicado Teixeira
Keyword(s):  
Value Creation ◽  
Economic Value ◽  
Value Added ◽  
Business Environment ◽  
World Health ◽  
Cost Of Equity ◽  
First Semester ◽  
Operating Profit ◽  
Global Pandemic ◽  
Health Organization

Operating in an already challenging business environment, companies have faced yet another difficulty since March 2020, when the World Health Organization (WHO) declared a global pandemic situation related to the COVID-19 disease. The study's purpose was to analyze the value creation in Euronext Lisbon companies from the first semester of 2019 to the first semester of 2020. The aim was also to identify the areas with the most impact on value creation. To measure value creation, the indicator economic value added (EVA®) was used. The results revealed that the capacity to create value decreased for all companies. The variables included in the study that showed a statistically significant relationship with EVA® were operating profit, sales revenue, and cost of equity. This pandemic situation poses a significant threat to value creation, enhancing the idea that, more than ever, business management needs to focus on long-term value creation strategies.

Siemens' Value-Driver Tree in Digitalization

2021 ◽  
pp. 197-220
Author(s):  
Cozmiuc Claudia Diana
Keyword(s):  
Value Creation ◽  
Business Models ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Sufficient Data ◽  
Product Lifecycle ◽  
Open Networks ◽  
Start Ups

This chapter is a descriptive and explicative case study about value creation at Siemens in an uncertain and in a certain environment. Siemens has implemented economic value-added-based management since 1998. The empirical data analysis highlights value creation at Siemens at the beginning of the innovation lifecycle, when the environment is uncertain, and at the end of the innovation lifecycle, when contracts are signed, and the environment becomes predictable. Innovation is first placed in open networks, in which start-ups are essential, to which venture capital is allocated using business models. This is the ideation stage of the product lifecycle, when competitive advantage, the essence of value creation in both theory and the Siemens example, is created. Innovation matures, and Siemens closes contracts with customers about existing customer offerings. These contracts are managed as projects and funded with equity and debt. This is the stage when sufficient data exists to plan economic value added, the focus of Siemens' corporate governance.

Briggs & Stratton, Inc.

2017 ◽  
pp. 1-17
Author(s):  
Kenneth M. Eades ◽  
Martson Gould ◽  
Jennifer Hill
Keyword(s):  
Performance Evaluation ◽  
Performance Measurement ◽  
Student Learning ◽  
Economic Value ◽  
Value Added ◽  
Strategic Plan ◽  
Economic Value Added ◽  
Comprehensive Strategy ◽  
Enhance Student Learning

The student's task is to develop a comprehensive strategy for Briggs & Stratton, which is facing severe competition and margin pressures. A major component of the strategy to be considered is whether to implement economic value added (EVA) as a new performance measurement for management. The case is designed to serve as an introduction to how to compute and use EVA. It emphasizes the importance of performance evaluation as part of a larger strategic plan. A teaching note is available to registered faculty, as well as two video supplements to enhance student learning.

scholarly journals The Influence of Economic Value Added and Return on Assets on Created Shareholders Value: A Comparative Study in Jordanian Public Industrial Firms

2017 ◽  
Vol 9 (4) ◽  
pp. 63 ◽  
Author(s):  
Sliman S. Alsoboa
Keyword(s):  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Return On Assets ◽  
Industrial Firms ◽  
Value Added Model ◽  
Market Value Added ◽  
And Performance ◽  
The Relationship ◽  
Financial Measure

This study has two main objectives. The first one is to address the relationship between Economic Value Added (EVA) and Created Shareholders Value (CSV) in Jordanian public industrial firms (JPIF), comparing to the Return on Assets (ROA) over the period 2011-2015. The second objective is to address the possible superiority of EVA to ROA by explaining the changes in CSV for JPIF. In this study, CSV is measured using two models; Fernandez model and market value added model. Multiple and simple regressions were used in the study. These analyses have shown, generally, that the superiority of EVA in predicting and evaluating the CSV could be put into a conclusive and positive light compared to ROA. However, the results suggested that one financial measure cannot be enough to measure neither CSV nor firms’ performance. Therefore, this study highly recommends that JPIF use a combination of different measure in assessing and evaluating their value and performance, especially modern indicators.

An Integrated View of Strategic Management

2007 ◽  
Vol 18 (4) ◽  
pp. 275-302 ◽  
Author(s):  
Juan Pablo Stegmann
Keyword(s):  
Critical Thinking ◽  
Strategic Management ◽  
Market Power ◽  
Value Creation ◽  
Economic Value ◽  
Value Added ◽  
Integrative Model ◽  
Economic Value Added ◽  
Stock Value ◽  
Different Levels

Strategic management has produced an amazing number of theories and models in the last decades. However, so far it has not succeeded in producing a good integrative model that can synthesize all the existing models. In a previous paper I proposed such a model (from now on we will refer to it as the GEMK model, in relation to Growth-EVA-Market Power-Knowledge). It is based on the two drivers of stock value creation, Economic Value Added (EVA) and growth of capital, and proposes two new testable variables, market power and knowledge. This paper is the application of the GEMK model. It shows how most of existing strategic management models impact stock value creation. It produces a valuable simplification of the discipline, eliminates confrontations, shows that several different theories are complementary, provides a new powerful critical thinking, and shows that the different theories are contingent to these four variables. Most importantly, it shows that the different theories have different levels of impact on stock value creation.

scholarly journals Corporate social responsibility and value creation

2019 ◽  
Author(s):  
Sorush Niknamian
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Value Creation ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added ◽  
Pooled Data ◽  
Different Dimensions ◽  
Statistical Sample ◽  
Corporate Social

Various studies have studied the effect of corporate social responsibility on the performance of organizations. The recent studies in this field specifically have considered the measurement of corporate social responsibility. The present study is aimed to measure the different dimensions of corporate social responsibility and their impact on the performance of firms based on economic value-added and cash value added. Based on the extensive concept of corporate social responsibility, to evaluate each of economic, legal and ethical dimensions, corporate social responsibility based on Carrol theory has applied a new method to quantify this qualitative concept. The statistical sample consists of 104 firms during 2007 to 2016. To test the study hypotheses, multi-variate regression model and pooled data methods are used. It was found that there was a positive and significant relationship between economic, legal and ethical dimensions of corporate social responsibility and value-added. It means that economic value added and cash value added are affected via corporate social responsibility in different dimensions and are increased.

scholarly journals Application of EVA concept in business "SBB" limited liability company Belgrade

2020 ◽  
Vol 8 (2) ◽  
pp. 70-77
Author(s):  
Dragana Bešlić-Obradović ◽  
Ivana Bešlić-Rupić
Keyword(s):  
Economic Value ◽  
Limited Liability ◽  
Value Added ◽  
Business Environment ◽  
Company Performance ◽  
Economic Value Added ◽  
Limited Liability Company ◽  
Total Cost ◽  
New Concepts ◽  
A Company

The contemporary business environment has imposed the need to continuously find and define new concepts and tools that support the strategic management of a company. Among them, Economic Value Added - EVA is considered as the essential principle for the evaluation of company performance in terms of shareholder return. EVA is taxable profit less the total cost of capital (borrowed and owned). The contribution of the EVA concept is reflected by looking at economic rather than accounting profits. This concept was adopted by many companies in Serbia, among which is also "SBB" limited liability company - Belgrade.

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