title: Toward better measurement of financial performance: A robust OEVA–TEVA alternative to biased EVA
metadata.name: dc.contributor.author
metadata.value: Ibragimov, Rauf G.
metadata.lang: -
metadata.name: dc.contributor.author
metadata.value: Vélez-Pareja, Ignacio
metadata.lang: -
metadata.name: dc.date.accessioned
metadata.value: 2019-07-18T13:12:59Z
metadata.lang: -
metadata.name: dc.date.available
metadata.value: 2019-07-18T13:12:59Z
metadata.lang: -
metadata.name: dc.date.issued
metadata.value: 2019-06
metadata.lang: -
metadata.name: dc.identifier.citation
metadata.value: Ibragimov R.G., Vélez-Pareja I. 2019. Toward better measurement of financial performance: A robust OEVA–TEVA alternative to biased EVA. Russian Management Journal 17 (2): 139–158.
metadata.lang: en_GB
metadata.name: dc.identifier.other
metadata.value: https://doi.org/10.21638/spbu18.2019.201
metadata.lang: -
metadata.name: dc.identifier.uri
metadata.value: http://hdl.handle.net/11701/15992
metadata.lang: -
metadata.name: dc.description.abstract
metadata.value: We demonstrate analytically and illustrate with examples that the conventional measures of the residual operating income such as the Economic Value Added (EVA) are biased by design and so may yield a misleading assessment of financial performance. Fundamentally, the magnitude of the measurement error depends on the amount of realized interest tax shields and the book to value ratio. Other potentially significant sources of distortions induced by the EVA design are identified as well. We propose a robust alternative that is a concurrent evaluation of the firm’s operating and total performance by means of two related metrics, the Operating EVA (OEVA) and the Total EVA (TEVA). Coherent implementation of the OEVA–TEVA technique is simpler than the EVA both analytically and computationally. It is also able to provide additional information for the management decision making. The overall consistency of the OEVA–TEVA approach is supported by a formally proved equivalence of the corresponding OEVA–TEVA valuation model to the fundamental valuation by the cash flow discounting.
metadata.lang: en_GB
metadata.name: dc.language.iso
metadata.value: en
metadata.lang: en_GB
metadata.name: dc.publisher
metadata.value: St Petersburg State University
metadata.lang: en_GB
metadata.name: dc.relation.ispartofseries
metadata.value: Russian Management Journal;Volume 17; Issue 2
metadata.lang: -
metadata.name: dc.subject
metadata.value: financial performance measurement
metadata.lang: en_GB
metadata.name: dc.subject
metadata.value: operating EVA
metadata.lang: en_GB
metadata.name: dc.subject
metadata.value: total EVA
metadata.lang: en_GB
metadata.name: dc.subject
metadata.value: economic value added
metadata.lang: en_GB
metadata.name: dc.subject
metadata.value: market value added
metadata.lang: en_GB
metadata.name: dc.subject
metadata.value: valuation
metadata.lang: en_GB
metadata.name: dc.title
metadata.value: Toward better measurement of financial performance: A robust OEVA–TEVA alternative to biased EVA
metadata.lang: en_GB
metadata.name: dc.type
metadata.value: Article
metadata.lang: en_GB
resources.filename: 139-158.pdf
resources.url: https://dspace.spbu.ru/bitstream/11701/15992/1/139-158.pdf
resources.format: Adobe PDF
resources.size: 340,15 kB