Business, Management and Accounting
8 years ago

Traditional accounting measures outshine EVA in predicting firm market value.

Global Economics and Management Review
The impact of performance measures, leverage and efficiency on market value added: Evidence from Iran
Mohammad Alipour, Mohammad Ebrahim Pejman

Paper Summary

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The article examines different ways to measure a company's performance and how they relate to its market value in Iran. They looked at 450 companies over several years and found that traditional measures like return on sales and return on assets are better at predicting market value than Economic Value Added (EVA). This means that EVA may not be a good indicator of how well a company is doing in the stock market. This study is one of the first to look at these measures in the Iranian market and shows that EVA may not be as useful for investors in this region.