Economic Value Added and Market Value Added as A Measuring Tool for Financial Performance

Silvia, Rina; Wangka, Novriani

doi:10.23887/ijssb.v6i1.30371

Cited by 2 publications

(2 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The company's fundamental goal is mainly to enhance the value of its shareholders. Economic Value-Added serves as an important metric that quantifies a company's financial performance, taking into account the economic profit generated after covering the cost of capital (Silvia & Wangka, 2022). However, EVA of DT-SACCOs in Nairobi City County, has depicted a concerning trend as revealed by data spanning from 2011 to 2021 (SASRA, 2022).…”

Section: Statement Of the Problemmentioning

confidence: 99%

Financial Risk and Shareholders Wealth of Deposit Taking Saccos in Nairobi City County

2023

JFA

View full text Add to dashboard Cite

Since 2010, DT-SACCOs in the country have struggled with poor financial performance due to financial risks and the inability to retain funds for capital growth, consequently failing to meet shareholder expectations for increased wealth. The general objective of this study was to investigate the effect of financial risk on the wealth of shareholders of DT-SACCO in Nairobi City County. The specific objectives of the study were to examine the effect of capital, credit, and liquidity risk on value of shareholders' wealth. The study also investigated the moderating influence of Sacco asset size. The study was anchored on four theories: stewardship theory, the buffer theory of capital adequacy, the shiftability theory of liquidity and the modern portfolio theory. The study opted for a positivist research philosophy over interpretivism and realism. This positivism approach facilitated a clear, empirical examination of causal relationships within a structured explanatory research design, targeting a specific population of 43 licensed DT-SACCOs. The diagnostic tests used comprise of normality, autocorrelation, homoscedasticity, stationarity, and multicollinearity. The data for this research was sourced from the Sacco Society Regulatory Authority and SACCOs reports covering 2011 to 2021. Analysis was conducted using Stata 16. Results of corelation reveal a positive association between capital risk and shareholders wealth, while credit risk was found to have a negative relationship with shareholders wealth. Liquidity risk had a negative relationship with the value of shareholders' wealth. In addition, the DT-SACCO size showed a positive association in relation to shareholders' wealth. Results of Panel regression analysis shows a positive and statistically significant association between capital risk and shareholders wealth of DT-SACCOs of Nairobi city county. The capital risk had a coefficient estimate of 1.1400 and its p-value is 0.00900. However, it can be noted that the credit risk did not significantly affect shareholder wealth. The results were indicated by a coefficient of -2.6600 and a p-value 0.6350 for this variable. Contrary, it was noted that liquidity risk affected shareholder wealth negatively by a coefficient of -5.7600 and p-value of 0. 0000. Firm size had a statistically significant moderating effect on the interaction between financial risk variables on shareholders wealth. The study recommended that SACCOs embrace effective capital risk management practices by adopting optimal riskreturn balance, diversifying sources of capital and developing strong monitoring mechanisms for risks. In addition, the study recommends for SACCOs to develop comprehensive liquidity risk management policies, closely monitor liquidity adequacy ratio, and cash flow projections and diversify funding sources.

show abstract

Section: Statement Of the Problemmentioning

confidence: 99%

Financial Risk and Shareholders Wealth of Deposit Taking Saccos in Nairobi City County

2023

JFA

View full text Add to dashboard Cite

show abstract

“…So, suggestions made by this study was that companies should use a reasonable amount of debt. Silvia & Wangka, (2022), This study was initiated with a view to made a comparison between Bharat Petroleum Corporation Ltd and Hindustan Petroleum Corporation Ltd with the help of Value-Added Statement (VAS). The primary objective of this research was to find out whether there is any significant difference in the principle important factor or not.…”

Section: Concept Of Value-added Statementmentioning

confidence: 99%

A Comparative Study on Value Added Ratios of Ultratech Cement Ltd and Ambuja Cement Ltd

Chirodiya

2022

jommerce

View full text Add to dashboard Cite

This is a comparative study of Ultratech Cement Ltd and Ambuja Cement Ltd. For the comparison Value Added Statement and Value-Added Ratios are used. For the purpose of calculation of Value-Added Statement and Value-Added Ratios data was taken from the annual reports of both companies from 2017-18 to 2021-22. For the purpose of data analysis T-test is used. Important findings of this study are that 4 ratios out of 5 are showing that there is no significant difference between the performance of both companies.

show abstract

Economic Value Added and Market Value Added as A Measuring Tool for Financial Performance

Cited by 2 publications

References 0 publications

Financial Risk and Shareholders Wealth of Deposit Taking Saccos in Nairobi City County

Financial Risk and Shareholders Wealth of Deposit Taking Saccos in Nairobi City County

A Comparative Study on Value Added Ratios of Ultratech Cement Ltd and Ambuja Cement Ltd

Contact Info

Product

Resources

About