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A Study of the Relationship between Economic Criteria and Performance Evaluation Accounting with Marketât's Value added in the Firms Listed in the Tehran Stock Exchange

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Author Affiliations

  • 1Department of Accounting, Gilan Science and Research Branch, Islamic Azad University, Gilan, IRAN
  • 2 Department of Accounting, Payame Noor University, Birjand, IRAN
  • 3 Department of Accounting, Faculty of Management and Accounting, Chaloos Branch, Islamic Azad University, Chaloos, IRAN

Res. J. Recent Sci., Volume 2, Issue (7), Pages 31-36, July,2 (2013)

Abstract

Currently most analysts believe that market’s value added is a major indicator in assessing the shareholders’ wealth increase. Therefore, one purpose of the present paper is to specify criteria which are closely related to this issue and are capable of assessing the performance of economic units and ultimately, their wealth in a more accurate fashion.This paper examines the relationship between moderated economic value added as well as some accounting and financial criteria such as return on stock, earnings per share (EPS), return on assets and return on equities with the market’s value added as an external indicator of value-creation (the study’s dependent variable) between 2006 and 2010 using the pooled data method. Results indicate that all study variables are in direct linear and significant relationship with market value added at a 95% confidence level. At the same time, the results suggest that moderated economic value added, after returns on equities, has the strongest relationship with market value added.

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