Publication detail

Measuring a Company s Performance: The Identification of Correlation between EVA and Selected Financial Measuring a Companys Performance: The Identification of Correlation between EVA and Selected Financial Indicators with Use of Genetic Algorithm

DOSTÁL, P. PAVELKOVÁ, D.

Original Title

Measuring a Company s Performance: The Identification of Correlation between EVA and Selected Financial Measuring a Companys Performance: The Identification of Correlation between EVA and Selected Financial Indicators with Use of Genetic Algorithm

Type

journal article - other

Language

English

Original Abstract

This paper deals with topic of measuring company s performance using different concepts, tools and indicators. It defines the requirements on a concept or an indicator, which it should meet in order to reflect the real performance of a company. The authors describe and compare value-based concepts and the traditional financial analysis indicators. They demonstrate their interest in particular concepts on basis of a survey on an extensive sample of companies in the Czech Republic, and the authors conclude that the use of traditional financial indicators hugely prevails, despite the value based indicators demonstrate much stronger connection to the market value of a company. On the grounds of a research into contemporary literature on the subject as well as on basis of authors own experience, they point out the Economic Value Added (EVA) to the application of selected value-based concepts and measures as a measure for company performance evaluation, which meets the required parameters. It can be used very effectively for identification of strengths and weakness of company performance at various levels of management. The EVA indicator may also be interconnected with the financial analysis indicators with use of pyramidal breakdown of EVA. At the same time, the problems of calculation of EVA which is often restrained due to a lack of input information, is stressed. The authors inquire into a question whether a relationship between the value of EVA and the selected indicators of traditional financial analysis may be found using genetic algorithms for clustering into different groups of performance. They show that, to a certain degree of probability, this relationship may be proved with selected parameters. This method may be therefore also used for categorization of company s performance without the need to adjust accountings data for the EVA calculation

Keywords

Company performance, value-based management, indicators, financial analysis, EVA, pyramidal breakdown, genetic algorithm

Authors

DOSTÁL, P.; PAVELKOVÁ, D.

RIV year

2013

Released

26. 9. 2013

Publisher

Wseas

Location

USA

ISBN

1109-9526

Periodical

WSEAS Transactions on Business and Economics

Year of study

10

Number

3

State

Republic of Austria

Pages from

285

Pages to

293

Pages count

9

BibTex

@article{BUT101647,
  author="Petr {Dostál} and Drahomíra {Pavelková}",
  title="Measuring a Company s Performance: The Identification of Correlation between EVA and Selected Financial Measuring a Companys Performance: The Identification of Correlation between EVA and Selected Financial Indicators with Use of Genetic Algorithm",
  journal="WSEAS Transactions on Business and Economics",
  year="2013",
  volume="10",
  number="3",
  pages="285--293",
  issn="1109-9526"
}