Abstract
The purpose of this study is to examine the superiority of Economic value added (EVA) over conventional accounting measures as a performance measure and to study which of these modern or conventional measures rightly captures its influence on a firm’s market value. The present research analysis is performed on a sample of five companies selected from FMCG sector listed on NSE for a period of Nine years between the time periods 2003-2014. The present study is done using Panel Data Regression technique with EVA, MVA and other Accounting measures to gauge both relative and incremental information content of these measures. The study reveals that the relative information content tests prove that conventional accounting measures are more closely associated with market value of the firm than EVA measure reflected in stock price. However, incremental information content tests suggest that EVA adds more explanatory power to its influence on market value of the firm than other conventional accounting measures.
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