EVA™, EPS, ROA and ROE as Measures of Performance in Australian Banks: A Longitudinal Study

Gregory Laing; Kirsty Dunbar

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EVA™, EPS, ROA and ROE as Measures of Performance in Australian Banks: A Longitudinal Study

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EVA™, EPS, ROA and ROE as Measures of Performance in Australian Banks: A Longitudinal Study

Gregory Laing and Kirsty Dunbar

Journal of Applied Management Accounting Research, Vol.Winter, pp.41-48

2015

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Abstract

Accounting, Auditing and Accountability

economic value added

relative information content

incremental information content

Australian Banking Firms

This research empirically tests the relative and incremental information content of performance measures EVA, EPS, ROA and ROE against the Market Value of the shares in the four major Australian banks. Data was obtained from database sources for the purpose of calculating the EVA and extracting the EPS, ROA, ROE and Share Market Value of the four major banks in Australia for the years 2003 to 2011. Two null hypotheses were derived from the literature and tested using the Multiple Linear Regression method. In contrast to results commonly reported, no significant relationship was found between EVA and the market value in terms of relevant information content. However, the incremental information content of EVA was found to be significant in the model tested. This study did not test the different models for calculating EVA which future research may investigate. Future research may also examine more performance measures in the model.

Details

Title: EVA™, EPS, ROA and ROE as Measures of Performance in Australian Banks: A Longitudinal Study
Authors: Gregory Laing (Author) - University of the Sunshine Coast - Faculty of Arts and Business
Kirsty Dunbar (Author) - University of the Sunshine Coast - Faculty of Arts and Business
Publication details: Journal of Applied Management Accounting Research, Vol.Winter, pp.41-48
Publisher: Institute of Certified Management Accountants
Date published: 2015
ISSN: 1443-9905; 1443-9905
Organisation Unit: School of Business and Creative Industries; University of the Sunshine Coast, Queensland; USC Business School - Legacy
Language: English
Record Identifier: 99449169902621
Output Type: Journal article
Research Statement: false

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