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Article: Does EVA® beat earnings? Evidence on associations with stock returns and firm values

TitleDoes EVA® beat earnings? Evidence on associations with stock returns and firm values
Authors
Biddle, GCBowen, RMWallace, JS
KeywordsCash from operations
Charge for capital
Earnings
Economic profits
Economic value added (EVA)
Firm market value
G14
Incremental information content
M41
Relative information content
Residual income
Value-relevance
Issue Date1997
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jae
Citation
Journal Of Accounting And Economics, 1997, v. 24 n. 3, p. 301-336 How to Cite?
DOI: http://dx.doi.org/10.1016/S0165-4101(98)00010-X
AbstractThis study tests assertions that Economic Value Added (EVA®) is more highly associated with stock returns and firm values than accrual earnings, and evaluates which components of EVA, if any, contribute to these associations. Relative information content tests reveal earnings to be more highly associated with returns and firm values than EVA, residual income, or cash flow from operations. Incremental tests suggest that EVA components add only marginally to information content beyond earnings. Considered together, these results do not support claims that EVA dominates earnings in relative information content, and suggest rather that earnings generally outperforms EVA.
Persistent Identifierhttp://hdl.handle.net/10722/129004
ISSN
0165-4101
2023 Impact Factor: 5.4
2023 SCImago Journal Rankings: 8.337
SSRN
2948
ISI Accession Number ID
WOS:000076142700003
References
References in Scopus

 

DC FieldValueLanguage
dc.contributor.authorBiddle, GCen_HK
dc.contributor.authorBowen, RMen_HK
dc.contributor.authorWallace, JSen_HK
dc.date.accessioned2010-12-09T03:05:32Z-
dc.date.available2010-12-09T03:05:32Z-
dc.date.issued1997en_HK
dc.identifier.citationJournal Of Accounting And Economics, 1997, v. 24 n. 3, p. 301-336en_HK
dc.identifier.issn0165-4101en_HK
dc.identifier.urihttp://hdl.handle.net/10722/129004-
dc.description.abstractThis study tests assertions that Economic Value Added (EVA®) is more highly associated with stock returns and firm values than accrual earnings, and evaluates which components of EVA, if any, contribute to these associations. Relative information content tests reveal earnings to be more highly associated with returns and firm values than EVA, residual income, or cash flow from operations. Incremental tests suggest that EVA components add only marginally to information content beyond earnings. Considered together, these results do not support claims that EVA dominates earnings in relative information content, and suggest rather that earnings generally outperforms EVA.en_HK
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/jaeen_HK
dc.relation.ispartofJournal of Accounting and Economicsen_HK
dc.rightsThis work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.-
dc.subjectCash from operationsen_HK
dc.subjectCharge for capitalen_HK
dc.subjectEarningsen_HK
dc.subjectEconomic profitsen_HK
dc.subjectEconomic value added (EVA)en_HK
dc.subjectFirm market valueen_HK
dc.subjectG14en_HK
dc.subjectIncremental information contenten_HK
dc.subjectM41en_HK
dc.subjectRelative information contenten_HK
dc.subjectResidual incomeen_HK
dc.subjectValue-relevanceen_HK
dc.titleDoes EVA® beat earnings? Evidence on associations with stock returns and firm valuesen_HK
dc.typeArticleen_HK
dc.identifier.emailBiddle, GC: biddle@hku.hken_HK
dc.identifier.authorityBiddle, GC=rp00230en_HK
dc.description.naturepostprinten_US
dc.identifier.doi10.1016/S0165-4101(98)00010-X-
dc.identifier.scopuseid_2-s2.0-0031593253en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0031593253&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume24en_HK
dc.identifier.issue3en_HK
dc.identifier.spage301en_HK
dc.identifier.epage336en_HK
dc.identifier.isiWOS:000076142700003en_US
dc.publisher.placeNetherlandsen_HK
dc.identifier.ssrn2948-
dc.identifier.scopusauthoridBiddle, GC=6701761934en_HK
dc.identifier.scopusauthoridBowen, RM=7201396281en_HK
dc.identifier.scopusauthoridWallace, JS=7402966869en_HK
dc.identifier.issnl0165-4101-

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