Volume & Issue no: Volume 9, Issue 1, January 2020
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Title: |
PERFORMANCE EVALUATION AND SHAREHOLDERS VALUE MAXIMISATION THROUGH CFROI AND EVA: AN EMPIRICAL STUDY |
Author Name: |
Prof. D.A.R. Subramanyam, Mr. K. Kiran Kumar |
Abstract: |
Abstract:
The major financial objective of a firm is the maximization of its shareholders’value. All management decisions and
approaches should contribute to this objective. Management, though, faces the problem of determining what the effect of its
actions would be on maximizing the shareholder’s value. A firm must be able to identify an appropriate measure to analyse its
financial performance which in turn reflects the shareholders’ value, measures like EVA and CFROI serve this purpose. This
paper aims at evaluating modern financial performance measures and maximizing shareholders value. This study has been
done using a sample of 20 Indian cement companies quoted on the Indian Stock exchanges from 2006 to 2017. The study
identifies that Shareholders value maximization measured by adjusted R2and found variations in stock markets explained by
EVA and CFROI.The study concluded that there is a significant positive relationship between CFROI and EVA and great
impact on stock market returns. Moreover, these two techniques are best financial performance measures for shareholders
value.
Key factors: EVA, CFROI, StMReand Regression analysis |
Cite this article: |
Prof. D.A.R. Subramanyam, Mr. K. Kiran Kumar , "
PERFORMANCE EVALUATION AND SHAREHOLDERS VALUE MAXIMISATION THROUGH CFROI AND EVA: AN EMPIRICAL STUDY" , International Journal of Application or Innovation in Engineering & Management (IJAIEM) ,
Volume 9, Issue 1, January 2020 , pp.
042-045 , ISSN 2319 - 4847.
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