Contact us
 |
[email protected] |
 |
3275638434 |
 |
 |
| Paper Publishing WeChat |
Useful Links
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Article
Author(s)
Murat Azaltun, Irem Batibay, Ilker Calayoglu
Full-Text PDF
XML 399 Views
DOI:10.17265/1537-1514/2013.02.004
Affiliation(s)
Murat Azaltun, Assistant Professor, Department of Accounting and Financial Management, School of Applied Sciences, Okan University.
Irem Batibay, Ph.D. candidate, Department of Accounting and Financial Management, School of Applied Sciences, Okan University.
Ilker Calayoglu, Ph.D. candidate, Department of Accounting and Financial Management, School of Applied Sciences, Okan University.
ABSTRACT
EVA is an acronym for economic value added, is a measure of corporate performance that differs from most others by including a charge against profit for the cost of all the capital a company employs. EVA is much more than just a measure of performance. It is the framework for a complete financial management and incentive compensation system that can guide every decision a company makes. It combines factors, such as economy, accounting, and market information in its assessment. The main objective of this study is to introduce the concept of Economic Value Added (EVA) and compare with the method of Earnings Per Share (EPS). This study aims to determine the effect of the Economic Value Added and Fundamental Analysis of the company’s earnings per share in the cement industry sector. Especially, the study is examined the economic crisis period 2000-2001 and 2007-2008 and their reflection to the financial statements of the cement companies. The methodology used in this research is a web-based data collection is the company’s financial statements and the company’s earnings per share amount which is then processed and analyzed using Microsoft Excel. Having obtained the results of analysis using Microsoft Excel, then the data are performed using the SPSS 17 statistical test to determine the effect of the Economic Value Added and Fundamental Analysis of the company’s earnings per share. This study employs pooled time-series, cross sectional data of listed 15 cement companies in the Istanbul Stock Exchange (IMKB) over the period 1999-2010 to examine whether EVA or Earnings Per Share (EPS) is associated more strongly with companies performance. Findings indicated that the proponents of EVA provided evidence to establish this method as a superior performance measurement and incentive compensation system and claimed that it is really better to use EVA, than Earnings per Share Method.
KEYWORDS
performance measures, EPS, EVA, Turkish cement industry, Economic Value Added (EVA), Earnings Per Share (EPS)
Cite this paper
References
Anastassis, C., & Kyriazis, D. (2007). The validity of the economic value added approach: An empirical application. European Financial Management, 13(1). 71-100.
Biddle, G. C., Bowen, M. R., & Wallace, J. S. (1997). Does EVA beat earnings?—Evidence on associations with stock returns and firm values. Journal of Accounting and Economics, 24(3), 301-336.
Boehlje, M. (2000). Economic value added, strategic business planning for commercial producers, center for food and Agricultural Business, Purdue University. Retrieved from http://www.agecon.purdue.edu/extension/sbpcp/resources/creatingvalue.pdf
Çakıcı, C. (2008). Ekonomik Katma Değer Yaklaşımı (p. 16). İstanbul: Beta Yayınları.
Drucker, P. (1995). The information executives truly need. Harvard Business Review, 73(1), 54-63.
Ehrbar, A. (1998). EVA the real key to creating wealth. New York: John Wiley & Son’s.
Erasmus, P. D. (2008). The relative and incremental information content of the value based financial performance measure cash value added (CVA). Management Dynamics, 17(1), 2-15.
Ferguson, R., Rentzler, J., & Yu, S. (2005). Does economic value added (EVA) improve stock performance or profitability? Journal of Applied Finance, 15(2), 101-113.
Ismail, A. (2006). Is EVA associated with stock return than accounting earnings? The UK evidence. International Journal of Managerial Finance, 2(4), 343-353.
Lefkowitz, S. D. (1999). The correlation between EVA and MVA of companies (MBA dissertation, California State University).
Lehn, K., & Makhija, A. K. (1997). EVA, accounting profits, and CEO turnover: An empirical examination. Journal of Applied Corporate Finance, 10(2), 90-96.
Lovata, L. M., & Costigan, M. L. (2002). Empirical analysis of adopters of economic value added. Management Accounting Research, 13, 215-228.
Maditinos, I. D., Sevic, Z., & Theriou, N. (2006). The introduction of economic value added (EVA) in the corporate world. Proceedings from The International Conference: Innovation, Entrepreneurship and Competitiveness in Balkan and Black Sea Countries. Kavala, Greece.
Peterson, P. P., & Peterson, D. R. (1996). Company performance and measures of value added. Charlottesville, V.A.: The Research Foundation of the Institute of Chartered Financial Analysts.
Sharma, K. A. (2010). Economic value added (EVA)—Literature review and relevant issues. International Journal of Economics and Finance, 2(2), 200-220.
Tuvey, C. L., Van Duren, E., & Sparling, D. (2000). The relationship between economic value added and the stock market performance of agribusiness firms. Agribusiness, 16(4), 399-416.