PERFORMANCE TREND AND PERFORMANCE CURRENT RATINGS BY ECONOMIC VALUE ADDED (EVA) Abstract: The Economic Value Added (EVA) is an index of „durable development.” It was proposed by the Stern-Stewart Office and represents the true economic profit of companies. A company reports economic profit only if the reported accounting profit is higher than the opportunity cost of equity. The authors of the EVA model (Stern-Stewart) have also proposed the ways of restating the financial statements to get a “fair image” of the results, thus eliminating the “accounting distortions.” Based on the performance indexes calculated based on EVA and second-generation indexes relating to EVA, we calculated two types of rating: Rating Performance Current and Rating Performance Trend. The rating is calculated by means of the percentiles technique and the results are split into 22 rating classes. The used database is Russell 3000

Alexandru, BOGEANU Author-Workplace-Name: The Bucharest University of Economic Studies; Elena, CLAUDIA SERBAN Author-Workplace-Name: The Bucharest University of Economic Studies; Vasile, ROBU Author-Workplace-Name: The Bucharest University of Economic Studies

PERFORMANCE TREND AND PERFORMANCE CURRENT RATINGS BY ECONOMIC VALUE ADDED (EVA) Abstract: The Economic Value Added (EVA) is an index of „durable development.” It was proposed by the Stern-Stewart Office and represents the true economic profit of companies. A company reports economic profit only if the reported accounting profit is higher than the opportunity cost of equity. The authors of the EVA model (Stern-Stewart) have also proposed the ways of restating the financial statements to get a “fair image” of the results, thus eliminating the “accounting distortions.” Based on the performance indexes calculated based on EVA and second-generation indexes relating to EVA, we calculated two types of rating: Rating Performance Current and Rating Performance Trend. The rating is calculated by means of the percentiles technique and the results are split into 22 rating classes. The used database is Russell 3000

BOGEANU Author-Workplace-Name: The Bucharest University of Economic Studies Alexandru, CLAUDIA SERBAN Author-Workplace-Name: The Bucharest University of Economic Studies Elena and ROBU Author-Workplace-Name: The Bucharest University of Economic Studies Vasile

Annals - Economy Series, 2013, vol. 5, 64-84

Keywords: Economic Value Added (EVA); rating; EVA Margin; EVA Momentum; Profitable Growth. Journal: Constatin Brancusi University of Targu Jiu Annals - Economy Series (search for similar items in EconPapers)
Date: 2013
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