The relationship between evaluation criteria and economic value added among accepted companies in Tehran Stock Exchange

Abstract

The economic value added ( EVA) can be regarded as one of the new criteria indicating the real performance of any company and an alternative to traditional criteria based on accounting profits as earnings per share (EPS), rate of return on equity (ROE), price to earnings per share ratio (P / E) and the rate of return on assets (ROA). In the present study, we obtained the relationship between traditional criteria for performance evaluation with new criteria (EVA) by regarding  the hypothesis that whether there is a relationship between the criteria listed with EVA. This research is based on descriptive correlation method. The samples include those companies accepted in Tehran Stock Exchange which were active members in the period of 2007 to 2011 in Stock Exchange and have no stopped funding. Results of the study showed that there is a significant relationship between company market value and economic value added and there is no significant relationship between ROE, ROA, EPS, P/E variables, and economic value added.