经济增加值EVA一种新的企业绩效衡量的实证研究外文翻译.docx

1、经济增加值EVA一种新的企业绩效衡量的实证研究外文翻译经济增加值（EVA）：一种新的企业绩效衡量的实证研究外文翻译 外文翻译Economic Value Added EVA super TM: an empirical examination of a new corporate performance measure. Material Source:/0. Author:Chen,Shimin; Dodd, James L. Is there a single measure of corporate performance enabling investors to identify i

2、nvestment opportunities and motivate managers to make value-added business decisions? Obviously, this is a question of utmost importance to investors, managers, and business researchers. Economic Value Added EVA has been acclaimed to be such a measure Tully, 1993. As defined by Stern Stewart Managem

3、ent Services of New York City, EVA is the difference between a companys net operating income after taxes and its cost of capital of both equity and debt Stern Stewart, 1993. Although the term EVA had appeared in the literature as early as 1989 Finnegan, 1989; Walter, 1992, it did not receive much at

4、tention until a September 20, 1993, article in Fortune magazine Tully, 1993. Following the articles strong praise of EVA as the most recent and exciting innovation in measuring corporate success, a flurry of papers have been published telling successful EVA stories and promoting EVA adoption Rutledg

5、e, 1993; Wilbert, 1993 and 1994; Birchard, 1994; Brossy and Balkcom, 1994; Byrne, 1994; McConville, 1994; White, 1994; Stewart, 1995 One major reason for EVAs sudden popularity is that it appears to have an impressive army of corporate sponsors including such giants as AT&T and Coca-Cola. Executives

6、 from these companies have stated how very satisfied they are with EVA as their new measurement tool. They have purportedly found the holy grail of corporate performance measures and now publicly share their high expectations for EVA to move their stocks up to a new high As one of the most enthusias

7、tic EVA proponents, Coca-Colas experience is anecdotal. Adopting EVA encouraged the company to concentrate capital in its highly profitable soft drink business and to raise return faster than the cost of capital by increasing the use of leverage. As a result, Coke increased its EVA by an average of

8、27% annually and its stock returned about 200% from the inception of EVA in 1987 to the middle of 1993. Jack Stahl, Cokes CFO, comments that EVA forces you to find ingenious ways to do more with less capital Tully, 1993: 48. The sentiment is echoed by CSXs CEO, EVA is anything but theoretical How we

9、 use capital determines market value Tully, 1993: 39. There is no doubt that when Roberto Goizueta, CEO of Coca-Cola, praises a new management idea, it sends a powerful message to his peers in Corporate America. Companies, large and small, appear eager to get on this new EVA bandwagon. Recently, we

10、made a search in Disclosure SEC and Edgar Plus CD-ROMs and found that the momentum is increasing. As indicated in their annual reports and/ or proxy statements, dozens of companies are starting to implement and integrate EVA into their performance measurement systems Companies appear to have become

11、enamored with EVA without asking provoking, critical questions such as: Is increasing EVA all that matters in the marketplace? Is EVA a real innovation that provides Corporate America with the golden key to creating wealth? Are the traditional measures of accounting earnings still useful? Are there

12、pitfalls that management needs to be aware of before embracing EVA? Our study addresses these questions and provides a preliminary empirical evaluation of EVA. Our analyses are based on public filings as reported by Compustat and data complied by Stern Stewart Management Services 1993. The Stern Ste

13、wart database contains EVA performance on 1,000 leading U.S. companies Our primary finding is that EVA is a useful measure of corporate performance. However, EVA is neither as perfect as claimed by its advocates, nor is it the only performance measure that suggests a path to a superior stock return.

14、 The following section describes our research questions in more detail. The empirical analyses and results are then presented. The article concludes with a summary and discussion of our findings While accounting profits such as earnings per share and return on equity are among the most commonly used

15、 performance measures, they are criticized for not taking into consideration the total cost of capital and for being unduly influenced by accrual-based accounting conventions. In contrast, EVA, the difference between after-tax operating profits and the total cost of capital, is promoted as a measure

16、 of a companys real profitability. Stern Stewart Management Service uses the following equation to calculate EVA in its 1,000 company database: EVA Return on Capital - Cost of Capital * Total Capital where 1 total capital is defined as the sum of total equity and interest-bearing debt, and 2 cost of

17、 capital is the weighted average cost of these two capital components. The equation illustrates the importance of the spread between return on capital and cost of capital in determining EVA. EVA allows investors to evaluate whether the return being earned on invested capital exceeds its cost as meas

18、ured by the returns from alternative capital uses. Management may do different things to create value for the business. Whatever it does, the value created will ultimately be reflected in the EVA measure. The EVA or value of a company increases if it: 1 raises operating profits without requiring mor

19、e capital, 2 uses less capital for the same level of operation, or 3 invests in projects that earn more than the cost of capital To promote goal congruence between divisions and the company as a whole, residual income defined as operating income minus imputed interest charge for investment was inven

20、ted and recommended as a comparable and better measure to ROI Horngren et al., 1996. In practice, the imputed interest charge is often the minimum acceptable return based on the cost of capital. There appears to be no difference between the measurement paradigm of residual income that has existed fo

21、r decades and EVA that has been recently promoted as an innovation While the acronym may be creative, EVA is simply a new version of a decades old practice called residual income based performance measurement. Certainly it is a well recognized and recommended practice. However, it is an empirical qu

22、estion of whether a relatively old idea like residual income can be reinvented to command such power in terms of its link to stock price as claimed by EVA proponents. Therefore, the first question to be examined is: Q1: Is the correlation between a com panys EVA and stock return as perfect as claime

23、d by EVA advocates Although EVA may be a conceptually better measure of profitability than accounting earnings, its relative strength has not been empirically verified. EVA and accounting earnings are not mutually exclusive. They are fundamentally related in that EVA is built upon operating profits

24、from an income statement. Even with all the adjustments proposed by Stern Stewart, it is still not difficult to discern the relationship between them. Thus, it is important to examine whether EVA provides additional information beyond accounting profit measures. On the other hand, although EVA advoc

25、ates propose replacing traditional accounting measures with EVA, empirically it remains to be seen whether accounting profits still provide useful information given that an EVA system is in place. Consequently, the second question to be addressed is: Q2: How does EVA compare to accounting profit in

26、terms of association with stock return As described earlier, EVA is a concept similar to residual income. Adjusting the equity equivalent reserves to both capital and operating profits, however, may differentiate EVA from residual income. EVA purportedly measures what investors truly care about, the

27、 net cash return from operations. In comparison, various accounting rules may distort residual income. A good example is the accounting for research and development R&D. From the asset valuation perspective, R&D expenditures are expected to bring about future benefits to a company and thus should be

28、 capitalized. However, Generally Accepted Accounting Principles GAAP require that R&D be expensed in the same period incurred, potentially distorting profit and capital. While it is conceptually sound to adjust for various distortions as proposed by Stern Stewart, the adjustments are not free. Compa

29、nies should not commit resources to make these adjustments unless they pass a cost-benefit test. Question three examines the usefulness of EVA versus residual income by asking: Q3: Does EVA provide more information than residual income in explaining the variation of stock return EMPIRICAL ANALYSES S

30、ample and Variables We selected the sample for analysis using a two-step method: 1 identify companies in the 1992 Stern Stewart 1,000 database that have complete data for the time frame 1983-92, and 2 retain only those companies with sufficient public data as reported by Compustat to perform our ana

31、lyses. The 1992 Stern Stewart Performance 1,000 is an EVA database complied by Stern Stewart Management Service Stern Stewart, 1993. Stern Stewart constructed the database using information provided by Standard & Poors Compustat Services. It contains various EVA measures of 1,000 companies in the U.

32、S. over a ten-year period from 1983 to 1992. These are leading publicly traded companies within 58 industry groups.2 Stern Stewart states that the purpose of the database is to provide a product for benchmarking performance, assessing business and financial risk, and spotting investment opportunitie

33、s Stern Stewart, 1993 First, as rightfully claimed by EVA advocates, improving EVA performance is associated with a higher stock return. However, the association of EVA with stock return is not as strong as suggested in anecdotal EVA stories.Second, the EVA measures provide relatively more information than the traditional measures of accoun