scholarly journals Performance Measures: An Application of Economic Value Added

2009 ◽  
Vol 4 (3) ◽  
Author(s):  
Nikhil Chandra Shil
Keyword(s):  
Performance Measures ◽  
Economic Value ◽  
Value Added ◽  
Economic Value Added

scholarly journals The information content of Economic Value Added of food-processing firms in the Czech Republic in the comparison with the information content of traditional performance metrics

2006 ◽  
Vol 54 (6) ◽  
pp. 77-84
Author(s):  
Gabriela Chmelíková
Keyword(s):  
Information Content ◽  
Performance Measures ◽  
Food Processing ◽  
Performance Metrics ◽  
Empirical Studies ◽  
Economic Value ◽  
Value Added ◽  
Superior Performance ◽  
Economic Value Added ◽  
Traditional Performance

The topic of this paper is motivated by the increasing popularity of Economic Value Added (EVA) and by the need to make the managing process of Czech agribusiness firms more efficient. Through adoption of EVA principle, the proponents of EVA argue, that EVA will lead to increased efficiency in the management and allocation of all assets and hence increased shareholder value. Though from the theoretical point of view EVA is seen as a superior performance metric, the results of the most empirical studies do not support this claim. One of the standard argument against EVA superiority results from the statistical survey of the relationship between EVA and traditional performance measures. Despite of the results of the most empirical studies this paper assumes (with regard to the specifics of Czech food processing sector) a difference in information content of EVA and traditional performance metrics. The intent of this article is to provide a simple regression test of the hypothesis that between EVA and traditional performance metrics is not tight linear dependency, which would point out that EVA has the same information content as traditional performance measures. The regression results indicate in all cases a positive correspondence between EVA and financial performance metrics with very low dependency of EVA on the financial metrics, which supports the examined hypothesis.

How Adopting New Performance Measures Affects Subjective Performance Evaluations: Evidence from EVA Adoption by Chinese State-Owned Enterprises

2017 ◽  
Vol 93 (1) ◽  
pp. 161-185 ◽  
Author(s):  
Fei Du ◽  
David H. Erkens ◽  
S. Mark Young ◽  
Guliang Tang
Keyword(s):  
Performance Measures ◽  
Economic Value ◽  
Value Added ◽  
Performance Evaluations ◽  
Chinese Government ◽  
Economic Value Added ◽  
Performance Score ◽  
Return On Equity ◽  
Fairness Concerns ◽  
Capital Efficiency

ABSTRACT This study investigates how adopting new performance measures affects the decision process through which supervisors make subjective adjustments. In our setting, the Chinese government substituted economic value added (EVA) for return on equity (ROE) in the performance score formula it uses to evaluate State-Owned Enterprises (SOEs). In accordance with the Chinese government's objective to increase the capital efficiency of SOEs, supervisors shifted the weight in subjective adjustment decisions from ROE to EVA after EVA adoption. Consistent with EVA adoption creating fairness concerns, however, supervisors did not penalize SOEs for performing poorly on EVA when they performed well on ROE, and accomplished this by shifting the weight from EVA back to ROE. Additional analyses suggest that personal preferences motivated supervisors to make these lenient subjective adjustments. Overall, our findings indicate that adopting new performance measures creates fairness concerns that motivate supervisors to consider their personal preferences in subjective adjustment decisions.

Interior Systems, Inc.: The Decision to Adopt EVA®

1999 ◽  
Vol 14 (3) ◽  
pp. 517-541 ◽  
Author(s):  
Robert M. Bowen ◽  
James S. Wallace
Keyword(s):  
Decision Making ◽  
Performance Evaluation ◽  
Performance Measures ◽  
Economic Value ◽  
Value Added ◽  
Residual Income ◽  
Executive Education ◽  
Economic Value Added ◽  
Education Programs ◽  
Undergraduate Level

The purpose of the Interior Systems case is to introduce and critique the use of residual income measures for decision making, performance evaluation, and incentive compensation. In this case we focus on Stern Stewart's proprietary measure of residual income, Economic Value Added (EVA®). The case uses the setting of a multidivisional company that is struggling with the decision of what measure to use in performance evaluation. The company recognizes that the choice of performance measures is likely to affect managers' motivations and in turn decision making. The problem the company faces is which measure to use, especially in light of the differing key success drivers of the different divisions. The case has been used successfully at the undergraduate level, in M.B.A. programs, and in executive education programs.

scholarly journals EVA measure and ability of the firm to create shareholder wealth

2007 ◽  
Vol 55 (6) ◽  
pp. 65-74 ◽  
Author(s):  
Gabriela Chmelíková
Keyword(s):  
Performance Measures ◽  
Capital Market ◽  
Food Processing ◽  
Economic Value ◽  
Value Added ◽  
Shareholder Wealth ◽  
Quality Information ◽  
Economic Value Added ◽  
Traditional Performance ◽  
The Relationship

This paper is devoted to the possibilities of Economic Value Added index usage in the conditions of Czech food-processing industry and is trying to provide independent empirical evidence on the indicator’s qualities. The EVA proponents attach to it a superiority compared to other common performance measures. The aim of this article is to investigate the relationship between Economic Value Added, traditional performance measures (ROA and ROE) and ability of creation of shareholder wealth for food-processing firms in the Czech Republic. The way of intended comparison is not dissimilar to the main world studies, which are quoted in this paper. A critical point of the EVA’s application in the conditions of Czech economy is a lack of good quality information from capital market, which at the same time, serve as an exogenous criterion for assessing the quality of the examined measures in the mentioned studies. In the absence of quality capital market information, a criterion for assessing the information content of performance measures suitable for conditions of Czech economy is developed in this paper. This also shows how to circumvent the handicap of the available data.The intent of this article is fulfilled by providing a simple regression test of the hypothesis, that the EVA measure is more associated with improved shareholder wealth than traditional performance measures ROA and ROE. The results of regression analysis show higher quality information content of EVA indicator in the relationship to the ability of shareholder wealth creation than traditional performance measures. This fact supports the tested hypothesis as well as the conclusions of corporate finance theory, that from the theoretical point of view EVA is seen as a superior performance metric.

Pengaruh Pengungkapan Corporate Social Responsibility (CSR) Pada Nilai Perusahaan

2011 ◽  
Vol 3 (2) ◽  
pp. 1-19
Author(s):  
Chermian Eforis ◽  
Rosita Suryaningsih
Keyword(s):  
Corporate Social Responsibility ◽  
Annual Report ◽  
Economic Value ◽  
Value Added ◽  
Market Value ◽  
Economic Value Added ◽  
Market Value Added ◽  
Csr Disclosure ◽  
Corporate Social ◽  
Simple Regression

This study aims to determine the influence of the level of CSR disclosure in annual report to corporate values that proxies with Economic Value Added (EVA) and Market Value Added (MVA).   The objects of this study are companies that were included in Kompas 100 Edition of the second review in 2010.The chosen model of this research is simple regression which can be defined as a model that used the normal probability plot  for data normality test, DurbinWatson test for autocorrelation, graph plots to test heteroscedasticity, and saw the value of tolerance and VIF for multicollinearity test. Hypothesis is analyzed using simple regression method  The results showed that the level of CSR disclosure contained in the annual report has a significant influence on the EVA. The same results were also found on the MVA, where the level of CSR disclosure contained in the annual report has a significant influence on the MVA. Key words: Corporate Social Responsibility, Economic Value Added, Market Value Added

KOMPARASI KINERJA KEUANGAN MELALUI PENDEKATAN ECONOMIC VALUE ADDED (EVA) PADA PERUSAHAAN TRANSPORTASI DI JAKARTA

2018 ◽  
Vol 3 ◽  
pp. 223-232
Author(s):  
Dwi Urip Wardoyo
Keyword(s):  
Financial Performance ◽  
Service Industry ◽  
Economic Value ◽  
Value Added ◽  
Added Value ◽  
Economic Value Added ◽  
Test Analysis ◽  
Transportation Service ◽  
Income Statement

This study aims to compare financial performance through profitability generated by two market participants in the witness transportation service industry in Jakarta, namely PT. BB compared to PT. ETU, this assessment is measured not limited to the profit generated but more than that by measuring financial added value through the concept of Eonomic Value Added produced by the two companies. The population in this study were all taxi transportation service companies in Jakarta. The sampling method selected two taxi companies that have the largest market share in DKI Jakarta, namely BB Taxi and ETU Taxi. The test analysis used in this study is ratio analysis through profit calculation and economic added value from the annual income statement. This study shows that there are (a) determination of the ratio of profit levels, (b) Determination of the comparison of economic value added of the two companies. Keywords :  Financial performance, Economic Value Added (EVA)

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