Australian Evidence Concerning the Information Content of Economic Value-Added

Worthington, Andrew C.; West, Tracey

doi:10.1177/031289620402900204

Cited by 92 publications

(77 citation statements)

References 20 publications

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“…For example, Worthington and West (2004) investigated the accounting measures (earnings before extraordinary items (ERN) and net cash flows from operations (NCF)) and economic measures (residual income (RI) and EVA) to find out which variable has the largest relative information content. Their research was on 110 Australian firms over the period 1992-1998 and they showed that EVA has the largest relative information content among others.…”

Section: Literature Reviewmentioning

confidence: 99%

Study of Information content Economic Value Added in Explain new models based on Free Cash Flow (CVFCFF and CVFCFE)

Kaviani¹

2013

ijafr

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Free Cash Flow (FCF) is one of the measures based on cash flow for measuring performance of firms, among various evaluation measure of performance; that indicates the cash of firm after doing necessary expenditures for keeping and developing properties. Due to that, various models based on FCF have been explained for evaluation of firms in which free cash flow to firm (FCFF) and Free Cash Flow to Equity (FCFE) can be considered as the important ones. This paper aims to give new models of Free Cash Flow. These models are called Created

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Section: Literature Reviewmentioning

confidence: 99%

Study of Information content Economic Value Added in Explain new models based on Free Cash Flow (CVFCFF and CVFCFE)

Kaviani¹

2013

ijafr

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“…Cross sectional analysis of the sample firms has been done using the tool of Regression Analysis. Another study for (Worthington and West, 2004), Pooled time-series, cross-sectional data on 110 Australian companies over the period 1992-1998 was employed to examine whether the trademarked variant of residual income known as economic value-added (EVA) was more highly associated with stock returns than other commonly-used accounting-based measures. These other measures of internal and external performance include earnings, net cash flow and residual income.…”

Section: Previous Studiesmentioning

confidence: 99%

The Impact of the General Level of Prices and Operating Profit on Economic Value Added (EVA) (Analytical Study: ASE 2001 - 2015)

Taha'at¹,

Al-Afeef²,

Tahat³

et al. 2017

ASS

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This study aims to show the importance of the economic value added as one of the most modern to measure the financial performance for firms, then to know the effect of the general prices level and earnings before interest and taxes on EVA in the companies listed in (ASE) (2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015), the researcher addresses a random sample consisting of (46) Company, and uses regression model, which connects the dependent and independent variables.The results of the study shows that There is a significant impact for the general prices level and the earnings before interest and taxes on the economic value added, and also shows that 22% of the changes in the economic value added are due to general prices level and earnings before interest and taxes, and 78% of the changes are due to other factors. This study also recommends the need to manage of operating expenses because of the positive impact of operating profit on EVA value, and to take inflation into account when calculating the value of EVA, and also searching for other factors that could affect the value of EVA such as sales volume, cost of capital, and the growth in the total assets of the company's financial leverage, etc…

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“…However, having identified that many scholars confirmed the findings of EVA promoters (for example; O'Byrne, 1996;Uyemura, Kantor and Petit, 1996;Milunovich and Tsuei,1996;Lehn and Makhija,1997;Herzberg,1998;and Forker and Powell, 2004;Worthington and West , 2004;Haddad, 2012) there are sufficient number of researchers (Peterson and, Peterson, 1996;Appleby, 1997;Turvey et al ,2000;Garvey and Milbourn, 2000;Keefand Rush, 2003;Sparling and Turvay, 2003;Paulo, 2003;Threemanna and Gunaratne, 2015)who have concluded in contrary to EVA proponents argument on the value relevance of EVA.…”

Section: Introductionmentioning

confidence: 99%

Is EVA an Effective Performance Measure; Evidence from Colombo Stock Exchange, Sri Lanka

Gunaratne

2017

AJFA

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The aim of this study is to explore the relationship between Economic Value Added (EVA) and stock return in Sri Lanka. The study sample consists of 1695 firm year observations covering 113 public limited companies listed in Colombo Stock Exchange (CSE) for 15 years period from 1999 to 2013. This study was based on secondary data, collected from the CSE data library and the published financial statements of companies considered in the sample. Pearson Correlation Coefficient analysis and the fixed effect model of Panel data Regression analysis techniques were used as the statistical techniques to analyze data. The statistical analysis revealed that there is no significant positive relationship between EVA and stock return in Sri Lanka. Contrary to the arguments of EVA proponents, the researcher suggests the market participants of Colombo Stock Exchange to select other performance measures instead of EVA to make rational economic decisions.

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Australian Evidence Concerning the Information Content of Economic Value-Added

Cited by 92 publications

References 20 publications

Study of Information content Economic Value Added in Explain new models based on Free Cash Flow (CVFCFF and CVFCFE)

Study of Information content Economic Value Added in Explain new models based on Free Cash Flow (CVFCFF and CVFCFE)

The Impact of the General Level of Prices and Operating Profit on Economic Value Added (EVA) (Analytical Study: ASE 2001 - 2015)

Is EVA an Effective Performance Measure; Evidence from Colombo Stock Exchange, Sri Lanka

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