Economic value-added (EVA) myths and realities: evidence from the Indian manufacturing sector

Sura, Jasvir S.; Panchal, Rajender; Lather, Anju

doi:10.1108/irjms-03-2022-0037

Cited by 4 publications

(3 citation statements)

References 43 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Several studies conducted empirical analysis that EVA is the best measure in explaining company performance compared to traditional accounting measurements in relation to the company's market value or stock returns. On the other hand, there are some drawbacks of these restrictions and have influenced with more efficient and significant measurements (Sura, Panchal, & Lather, 2023). EVA is considered as a better criterion than traditional measurements such as ROA, ROE, and ROI to measure value creation and internal performance of companies (Kumar, Bhatia, & Chattopadhyay, 2022).…”

Section: Literature Reviewmentioning

confidence: 99%

THE IMPACT OF FINANCIAL RATIOS ON THE VALUE OF COMPANIES THAT CONDUCTED M&A WHICH REGISTERED IN IDX ON 2016-2021

Duhita,

Rizkianto

2023

Dynamic MJ

View full text Add to dashboard Cite

This study aims to analyze the impact of the financial ratios such liquidity, solvability, turnover, profitability, and market value, economic value added and operating cash flow on the market value added of corporate mergers and acquisitions that listed in IDX from 2016 to 2021. The research informs influence of independent variables to MVA in companies that do M&A as their business strategy. The sampling technique in this study used non-probability sampling with purposive sampling method. Obtained samples of 19 public companies listed on the IDX and secondary data taken from the Indonesian Stock Exchange website. Financial performance measurement takes place five years before and after M&A. The analytical method uses panel data regression and from panel regression we found that EVA, CR, and ROE are significantly positive influenced with market value added of listed firms in Indonesia that conducted M&A. Our results indicate that earning per share significantly has negative influence to MVA; while DER and TATO are insignificantly negative influenced and OCF is insignificantly positive influenced with market value added.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

THE IMPACT OF FINANCIAL RATIOS ON THE VALUE OF COMPANIES THAT CONDUCTED M&A WHICH REGISTERED IN IDX ON 2016-2021

Duhita,

Rizkianto

2023

Dynamic MJ

View full text Add to dashboard Cite

show abstract

“…Furthermore, the authors found that the structural changes significantly impacted the performance of the Indian stock market. Sura, Panchal, and Lather (2023), in their article "Economic value-added (EVA) myths and realities: evidence from the Indian manufacturing sector" evaluates the importance of the economic value added (EVA) over the accounting-based financial performance measures, such as profit after tax (PAT), earnings per share (EPS), return on assets (ROA), return on equity (ROE) and return on investment (ROI) in the Indian manufacturing sector. It also examined the information content of various performance measures and their relationship with stock returns.…”

mentioning

confidence: 99%

Editorial: Leading the business to the recovery path

Mishra¹

2023

IRJMS

View full text Add to dashboard Cite

With a few exceptions, the world is recovering fast from the pandemic after-shocks. The time is also ripe for industries to press the re-boot button and make strategies as per the changing times. Earlier the success mantra was "survival for the fittest," but now it is "survival for the most adaptive". As per the various surveys, the impact as well as the recovery, has been uneven across industries. Industries such as hospitality, aviation, energy real estate, consumer durables, automotive, etc. among many others, reported a decline during the pandemic, while sectors such as healthcare, edutech and pharma were among those which reported growth during the period. Similarly, the recovery process too is dissimilar across the sectors. The reason may be the difference in industry dynamics and the consumers' response. Each sector is different based on the structure, competition intensity, monitoring and control mechanism, logistics, capital and labor requirements, level of consumers' engagement, etc. Therefore, it is imperative to understand the necessary elements of the industry before formulating the strategies to get to the recovery path. Over the world, academicians and practitioners are engaged in the debate about identifying the specific requirements and the ways to achieve those objectives.IIM Ranchi Journal of Management Studies (IRJMS) too, has provided the platform for such debate. IRJMS 2.1 presents the compendium of research on the process being followed across a few sectors. This issue comprises eight articles from various sectors. The first two articles belong to the public sector reforms in Ghana and Tanzania. Given the developing country status of these countries, public sector reforms are necessary for monitoring, controlling, and accountability. Similar to the public sector, banking too is an essential service for the economic growth of any nation. The following article discusses the tenets of bank stability. The following two articles touch upon another growth engine, i.e. the stock markets. Finally, the last three papers deal with three critical sectors: manufacturing, software and healthcare.There is a growing interest in bringing accountability to various institutions and governance. It leads to curiosity among researchers and regulators alike. Bonsu, Appiah, Gyimah, and Owusu-Afriyie (2023), in their paper "Public sector accountability: do leadership practices, integrity and internal control systems matter?" explores the current public sector accountability practices in the sub-Saharan African region, specifically Ghana. The study investigates whether integrity, internal control system and leadership influence public sector accountability in developing country. The study was conducted in Ghana, and focused on 26 ministries with 107 departments or agencies in the public sector. Based on the analysis of the cross-sectional data collected from a survey of 84 public sector departments or agencies in Ghana, the result showed a significant and positive influence of the factors on public sector accountab...

show abstract

“…Economic Value Added (EVA) is one of the key measures used to assess shareholder wealth (Subedi & Farazmand, 2020;Sura, Panchal & Lather, 2022;Ahmad, Alam & Yameen, 2019). The objective of using EVA as a metric for evaluating financial performance of a firm is attributed to the fact that it takes into account both the operating profits generated by a company and the capital invested in it hence capturing the true economic value generated by a company (Udiyana, Astini, Parta, Laswitarni, & Wahyuni, 2022).…”

mentioning

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

Economic value-added (EVA) myths and realities: evidence from the Indian manufacturing sector

Cited by 4 publications

References 43 publications

THE IMPACT OF FINANCIAL RATIOS ON THE VALUE OF COMPANIES THAT CONDUCTED M&A WHICH REGISTERED IN IDX ON 2016-2021

THE IMPACT OF FINANCIAL RATIOS ON THE VALUE OF COMPANIES THAT CONDUCTED M&A WHICH REGISTERED IN IDX ON 2016-2021

Editorial: Leading the business to the recovery path

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

Contact Info

Product

Resources

About