Performance Evaluation Using Accounting Variables (Net Profit and Operational Profit) and Economic Measures

Abstract

 Abstract—The paper seeks to examine the claim of economic measures advocate of their superiority as financial metrics compared with accounting measures. The paper uses a sample of public company accepted in Main market of Bursa Malaysia from 2001- 2010, and will apply panel data regressions to test the relative information content of EVA, REVA, EVA Momentum and other accounting variables (NP and OP) and the incremental information content of EVA components in explaining market value added (MVA). The data will collect from Bursa Malaysia, Universiti Malaya (UM), and Universiti Tekonologi Malaysia (UTM). We will use historical and secondary financial data, and for testing the hypothesis will use cross-sectional time series data, ordinary least square (OLS), panel data regressions, multivariate regression, correlation coefficient, coefficient of determination using SPSS. This study is expected to clarify the relationship between accounting and economic measures with market value added as a company's performance, and it could help to public companies' owners/managers in their making decision and increasing their performance. In this article, the conceptual model is proposed.