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New Metrics for Value-Based Management

Enhancement of Performance Measurement and Empirical Evidence on Value-Relevance

  • Authors
  • Annette Holler

Table of contents

  1. Front Matter
    Pages I-XXI
  2. Annette Holler
    Pages 1-11
  3. Annette Holler
    Pages 13-73
  4. Annette Holler
    Pages 75-105
  5. Annette Holler
    Pages 107-149
  6. Annette Holler
    Pages 151-189
  7. Annette Holler
    Pages 191-193
  8. Back Matter
    Pages 195-217

About this book

Introduction

Value-Based Management, a widely applied reference for strategic management, aims at maximizing sustainable shareholder value creation. However, respective accounting metrics to measure the firm’s wealth creation, such as residual income and Economic Value Added (EVA®), are distorted by accounting depreciation, implying inconsistent investment disincentives. Annette Holler introduces two new depreciation-adjusted value metrics and illustrates the depreciation-related bias in a case study. Finally, a regression analysis adds to previous evidence on associations between value creation and stock returns as well as firm values.

Keywords

Depreciation EVA Economic value added Performance Residual income accounting metrics management

Bibliographic information