TITLE:
Financial Performance Appraisal Using Economic Values Added in Emerging Markets: Evidence from Egyptian Listed Firms
AUTHORS:
Abdel-Karim Omneya, Salah Ashraf, Bekheit Bahaa Eldin
KEYWORDS:
Economic Value Added (EVA), Refined Economic Value Added (REVA), Economic Value Added Momentum (EVA Momentum), Financial Performance Measurement, Return on Assets (ROA), Relative and Incremental Information Content
JOURNAL NAME:
Open Journal of Social Sciences,
Vol.9 No.3,
March
30,
2021
ABSTRACT: The effectiveness of conventional accounting methods used for firm
financial performance measurement and analysis has been criticized. Theorists
started to put forward modern financial performance measures although their
significance is still under examination by
the researchers. Therefore, this study aims to investigate the impact of three contemporary economic based measures; economic value added (EVA), refined economic
value added (REVA) and economic value added momentum (EVA Momentum) on
firm financial performance in addition to finding out the economic value added
based measure with the highest explanatory power relevant to firm financial
performance via conducting relative and incremental information content
analyses. Data were collected for companies listed in the Egyptian Stock
Exchange over the period 2010-2019 excluding the financial sector. Generalized
Least Squares (GLS) regression is conducted using the statistical package of
EViews-version 10. The results showed
significant impact of all the economic value added measures on firm
financial performance. In addition, it was found that REVA could be considered as the most effective economic measure
in improving and explaining the financial performance.