EVA® or Traditional chronicle Measures; a posteriori Evidence from Iran
Mehdi ArabSalehi Department of Accounting and Finance, University of Isfahan, Isfahan, Iran E-mail: Mehdi_arabsalehi@acnt.ui.ac.ir Tel: +98-913-3289157 Iman Mahmoodi Department of Accounting and Finance, University of Isfahan, Isfahan, Iran E-mail: im_mahmoodi@yahoo.com Tel: +98-917-7236892 Abstract This study examines assertions that Economic Value Added (EVA®) is fantabulous as a performance measure comp atomic number 18d to traditional bill measures. The investigation is performed using a panel data social occasion for a sample consisting of 76 Iranian listed companies in the capital of Iran Stock Exchange from 2001 to 2008. Moreover, in this study, both relative and additive information topic approaches are employed. The results do not stand claims that EVA® dominates traditional accounting measures in relative information content. In the other words, relative information content tests revealed that stock returns are more closely associated with ROA, ROE and EPS than EVA®.
Moreover, the incremental information content tests indicate that EVA® adds only slightly to information content beyond accounting measures. However, the results suggest that accounting measures for the most part outperform EVA®.
Keywords: process Evaluation, Economic Value Added, Traditional Accounting Measures, Stock Returns
1. Introduction
It is grievous to recognize that the objectives of management may in some situations dissent from those of the companys shareholders. One of the best ways to induce management to relieve a shareholder orientation is to use performance measures. Moreover, it is generally accepted that the most important role of managers is to maximize the tighten value (Rappaport, 1986, 1998; Worthington and West, 2001, 2004 and Lovata and Costigan, 2002)....If you want to get a full essay, send it on our website: Ordercustompaper.com
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