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The Study and Analysis of Value Creating Criteria of Performance Assessment in Identification of Different Levels of Financial Health: Evidence from Iran


Affiliations
1 Department of Accounting, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran, Islamic Republic of
 

The present research aims at studying the significant differences of the performance assessment value creation in different levels of financial health of companies. Companies in this research have been divided into three groups of healthy, intermediate and distressed. The Economic Value Added (EVA), Market value Added (MVA) and Cash Value Added (CVA) differences of these three levels have been analyzed. From the 37 industrial entities and 224 Iranian companies, 84 companies have been selected through Cochran formula and they have been divided into 16 healthy, 45 intermediate and 19 distressed companies. The Excel software and SPSS software was used to test the hypotheses and Kruskal-Wallis statistical method was applied to compare the value added classified ratios at the level of 5% error. Research finding shows the significant statistical differences among the companies at different levels of financial health using MVA and EVA criteria, but there is no significant different in CVA of the above mentioned companies.

Keywords

Financial Health, Companies, Performance Assessment, Value Creation, Tehran Stock Exchange (TSE)
User

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  • The Study and Analysis of Value Creating Criteria of Performance Assessment in Identification of Different Levels of Financial Health: Evidence from Iran

Abstract Views: 285  |  PDF Views: 92

Authors

M. R. Pourali
Department of Accounting, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran, Islamic Republic of
M. Taghavi
Department of Accounting, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran, Islamic Republic of

Abstract


The present research aims at studying the significant differences of the performance assessment value creation in different levels of financial health of companies. Companies in this research have been divided into three groups of healthy, intermediate and distressed. The Economic Value Added (EVA), Market value Added (MVA) and Cash Value Added (CVA) differences of these three levels have been analyzed. From the 37 industrial entities and 224 Iranian companies, 84 companies have been selected through Cochran formula and they have been divided into 16 healthy, 45 intermediate and 19 distressed companies. The Excel software and SPSS software was used to test the hypotheses and Kruskal-Wallis statistical method was applied to compare the value added classified ratios at the level of 5% error. Research finding shows the significant statistical differences among the companies at different levels of financial health using MVA and EVA criteria, but there is no significant different in CVA of the above mentioned companies.

Keywords


Financial Health, Companies, Performance Assessment, Value Creation, Tehran Stock Exchange (TSE)

References





DOI: https://doi.org/10.17485/ijst%2F2011%2Fv4i10%2F30186