Dissatisfaction with traditional accounting-based performance measures has spawned a number of alternatives, of witch economic value added (EVA) is currently the most prominent. There is currently a heated debate among practitioners about whether the new performance have a higher correlation with stock values and their returns than do traditional accounting earnings. The paper seeks to examine the claim of EVA advocates of its superiority as a financial metric compared with other measures. The paper uses a sample of 150 firm observations from Tehran stock exchange between years 1380 and 1387 and applies panel data regressions to test the relative information content of EVA and other accounting measures and the incremental information content of EVA components in explaining stock return. It is found that net income and net operating profit after tax outperform operating cash flow and EVA in explaining stock return.
Hemati, H. , Kazemi, H. and Babaei, F. (2015). Evaluation of partial and differential information content of economic value added, accounting earnings and operating cash flow and return on equity. New Researches on Accounting, 1(2), 49-57.
MLA
Hemati, H. , , Kazemi, H. , and Babaei, F. . "Evaluation of partial and differential information content of economic value added, accounting earnings and operating cash flow and return on equity", New Researches on Accounting, 1, 2, 2015, 49-57.
HARVARD
Hemati, H., Kazemi, H., Babaei, F. (2015). 'Evaluation of partial and differential information content of economic value added, accounting earnings and operating cash flow and return on equity', New Researches on Accounting, 1(2), pp. 49-57.
CHICAGO
H. Hemati , H. Kazemi and F. Babaei, "Evaluation of partial and differential information content of economic value added, accounting earnings and operating cash flow and return on equity," New Researches on Accounting, 1 2 (2015): 49-57,
VANCOUVER
Hemati, H., Kazemi, H., Babaei, F. Evaluation of partial and differential information content of economic value added, accounting earnings and operating cash flow and return on equity. New Researches on Accounting, 2015; 1(2): 49-57.