Skip to main content
placeholder image

EVA as Superior Performance Measurement Tool

Journal Article


Download full-text (Open Access)

Abstract


  • Prior to the East Asian financial crisis scholars found the necessity of a true financial performance measure in Malaysia. After more than one decade of the crisis Malaysian firms still stick with the conventional performance measures, which are criticised due to general accepted accounting principles. In this vein, this study aims to study a value based financial performance measure which can be adopted by the Malaysian firms over the conventional measures currently used. Economic Value Added (EVA) was introduced and advocated by Stern Stewart and Co. in 1982. This study intended to identify why EVA should be used as financial performance measure over the conventional measures and any added value or added advantage in EVA compare to conventional methods. EVA has been able to gain attention of the corporate giants like Coca-Cola, Sprint Corporation and Quaker Oats, as it is able to depict the true profitability of the company, however, there have been very little research conducted on EVA in Asian countries including Malaysia.

Publication Date


  • 2012

Citation


  • Mamun, A. & Mansor, S. (2012). EVA as Superior Performance Measurement Tool. Modern Economy, 3 (3), 310-318.

Ro Full-text Url


  • https://ro.uow.edu.au/cgi/viewcontent.cgi?article=2733&context=buspapers

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/1702

Number Of Pages


  • 8

Start Page


  • 310

End Page


  • 318

Volume


  • 3

Issue


  • 3

Place Of Publication


  • United States

Abstract


  • Prior to the East Asian financial crisis scholars found the necessity of a true financial performance measure in Malaysia. After more than one decade of the crisis Malaysian firms still stick with the conventional performance measures, which are criticised due to general accepted accounting principles. In this vein, this study aims to study a value based financial performance measure which can be adopted by the Malaysian firms over the conventional measures currently used. Economic Value Added (EVA) was introduced and advocated by Stern Stewart and Co. in 1982. This study intended to identify why EVA should be used as financial performance measure over the conventional measures and any added value or added advantage in EVA compare to conventional methods. EVA has been able to gain attention of the corporate giants like Coca-Cola, Sprint Corporation and Quaker Oats, as it is able to depict the true profitability of the company, however, there have been very little research conducted on EVA in Asian countries including Malaysia.

Publication Date


  • 2012

Citation


  • Mamun, A. & Mansor, S. (2012). EVA as Superior Performance Measurement Tool. Modern Economy, 3 (3), 310-318.

Ro Full-text Url


  • https://ro.uow.edu.au/cgi/viewcontent.cgi?article=2733&context=buspapers

Ro Metadata Url


  • http://ro.uow.edu.au/buspapers/1702

Number Of Pages


  • 8

Start Page


  • 310

End Page


  • 318

Volume


  • 3

Issue


  • 3

Place Of Publication


  • United States