Interrelationships Among Corporate Performance Measures

22 Pages Posted: 1 Sep 2012

See all articles by Lokanandha Reddy Irala

Lokanandha Reddy Irala

School of Management Studies, University of Hyderabad

Raghunatha Reddy

Jawaharlal Nehru University

Date Written: 2008

Abstract

Firm Value Maximization as the objective function will guide managers in making the optimal business tradeoffs. While firm value maximization as a goal is widely accepted; not many agree on one way of achieving it

Traditionally corporate performance is measured using some variant of historical accounting income like Net Profit, EPS or some measures based on the maximizing accounting income will lead to firm value maximization.

There is growing criticism about the linkage of traditional measures and firm value and their ability to be consistent predictors of firm value creation. This lead to the mergence of value based performance measures

This paper attempts to provide some understanding of the interrelationships among select corporate performance measures in the Indian setting

Keywords: Performance measures, Interrelationships, Value creation, EVA

JEL Classification: G00, J33, L21, M40, M52

Suggested Citation

Irala, Lokanandha Reddy and Reddy, Raghunatha, Interrelationships Among Corporate Performance Measures (2008). Available at SSRN: https://ssrn.com/abstract=2139500 or http://dx.doi.org/10.2139/ssrn.2139500

Lokanandha Reddy Irala (Contact Author)

School of Management Studies, University of Hyderabad ( email )

Prof. CR Rao Marg
Gachibowli
Hyderabad, Telangana 500046
India
8247705022 (Phone)

HOME PAGE: http://www.irala.org

Raghunatha Reddy

Jawaharlal Nehru University ( email )

Vasant Vihar
Jawaharlal Nehru University
Hyderabad, DE Delhi 500072
India

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