Financial Performance Measures and Value Creation the State of the Art [Paperback]

The choice of? financial performance measures is one of the most critical challenges facing organizations. The accounting-based measures of financial performance have been viewed as inadequate, as firms began focusing on shareholder value as the primary long-term objective of the organization. Hence, value-based metrics were devised that explicitly incorporate the cost of capital into performance calculations.? Despite the increasing emphasis on these value-based measures, no definitive evidence exists of which metric works better than others, and on the extent to which any of them is? superior to traditional accounting measures. In this scenario, the objective? of this book is contributing to the ongoing dialogue on the appropriateness of different financial performance measures, by providing a systematic and updated review of the major value-based measures, by highlighting their respective strengths and weaknesses? and ?by comparing the main international empirical evidence on their effectiveness. This book can? be a powerful tool for guiding managers and graduate students in the tangled forest of? the existing metrics, by providing them with the quick, but adequate knowledge for consistently adopting them.This book offers critical reviews of value-based measures: Economic Value Added (EVA), Cash Flow Return on Investment (CFROI), Shareholder Value Added (SVA), Economic Margin (EM) and Cash Value Added (CVA). Helps the reader choose and use the best technique.

Introduction.- Criticism of the accounting-based measures of performance.- Competing financial performance measures. The metrics war.- Concluding remarks: strengths and weaknesses of the economic value measures. Appendices.- References.

The choice of?financial performance measures is one of the most critical challenges facing organizations. The accounting-based measures of financial performance have been viewed as inadequate, as firms began focusing on shareholder value as the primary lolsh