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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
Czech Title: Měření výkonnosti společnosti" Identifikace korelace mezi EVA a vybranými finančními idikátory s využitím genetických algoritmů
English 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
Author(s): DOSTÁL, P.; PAVELKOVÁ, D.
Type: journal article
Language: en
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
Czech abstract: Článek pojednává o měření výkonnosti podniku . K měření podnikové výkonnosti lze využít různých postupů. V článku autoři věnují pozornost možnostem využití komplexního přístupu k měření výkonnosti, jakým je concept of economic value added (EVA) a tradičního měření výkonnosti a hospodaření podniků pomocí ukazatelů finanční analýzy. Tradiční přístupy jsou v praxi manažery velmi oblíbené, zatímco využití EVA mnohdy brání nedostatek vstupních informací či pracnost výpočtů. Autoři v rámci výzkumu zkoumají, zda je možné najít vztah mezi výši dosahované EVA a vybranými ukazateli finanční analýzy. K tomuto účelu využili genetických algoritmů pro klastrování do kategorií výkonnosti a testovali, zda lze prokázat linearitu vztahu ukazatele EVA a vybraných ukazatelů finanční analýzy. Pomocí řešení 1-, 2- a 3-dimenzionálních úloh prokazují, že s určitou pravděpodobností lze tento vztah u vybraných parametrů potvrdit. Výsledky výzkumu lze využít v podnikové praxi nebo při tvorbě bonitních modelů.
English 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
RIV year: 2013
Released: 26.09.2013
Publisher: Wseas
Location: USA
Pages from: 285
Pages to: 293
Pages count: 9