外文翻譯--績效評估、經(jīng)濟增加值和管理行為（英文）

1、PES Business Review Vol. 01 No. 01 January 2006 Performance Evaluation, Economic Value Added and Managerial Behaviou

2、r Lokanandha Reddy Irala1Dr. Raghunatha Reddy2 Abstract For the past two decades many countries started transforming their economies from traditional protected ones to those of more liberalized, globalized and market

3、driven. This period has also seen the economies becoming more knowledge oriented and Human Resources started assuming more prominence in the growth of the economies and businesses posing a greater challenge for compan

4、ies to acquire and retain talented workforce (especially at the strategic & managerial levels). The knowledge economy also started witnessing the rapid rise of the agency problem- conflict of interest between mana

5、gers and owners. So it is very essential to align the interests of the mangers and shareholders or at least reduce the difference between them. In this regard Economic Value Added has been seen as better alternative t

6、o the stock price and traditional performance measures. While successful EVA stories in the west are quite encouraging, Corporate India is slowly catching up the EVA adoption. Although not a panacea, EVA based compen

7、sation plans will drive managers employ a firm’s assets more productively and EVA should help reduce the difference in the interests of the managers and shareholders, if not perfectly align them Key Words: EVA, Manage

8、rial Behaviour, Performance JEL Classification: G00, J33, L21, M40, M52 1. Introduction For the past two decades many countries started transforming their economies from traditional protected ones to those of more lib

9、eralized, globalised and market driven. This period has also seen the economies becoming more knowledge oriented and Human Resources started assuming more prominence in the growth of the economies and businesses. But

10、this has also posed a greater challenge for companies to acquire and retain talented workforce (especially at the strategic & managerial levels). The knowledge economy also started witnessing the rapid rise of the

11、agency problem- conflict of interest between managers and owners. The managers – in their role as the agents– are expected to act in the best interests of the shareholders (principals). Managers will act in sharehold

12、ers’ interests only if they have right incentives. So it is very essential to align the interests of the mangers and shareholders or at least reduce the difference between them. 1 Associate Professor & Director-Adm

13、inistration, Dhruva College of Management, Hyderabad. He can be reached at reddyirala@gmail.com 2 Associate Professor, School of Management Studies, JNTU, Hyderabad.

14、 He can be reached at drreddy5@yahoo.com Lokanandha Reddy Irala & Dr. Raghunatha Reddy Pa

15、ge 1 of 7 PES Business Review Vol. 01 No. 01 January 2006 3. What is Economic Value Added? Economic value added (EVA) provides th

16、e rupee value created for investors in a given time period by weighing the profit generated by a decision against the value of the capital employed to generate that profit. EVA is the Adjusted Net Operating Tax After

17、Tax (ANOPAT) for a period minus the capital charge (the rupee cost of capital) of the investment over that period. EVA can be expressed as EVA = Adjusted Net Operating Profit After Taxes (ANOPAT) - Capital Cost Where A

18、NOPAT3 = Capital Employed (CE) X ROCE (as ROCE = EBIT (1-T) / CE) Capital Cost = WACCX Capital Employed (CE) Thus EVA = Capital Employed (CE) X ROCE - WACC X Capital Employed EVA = (ROCE - WACC) Capita

19、l Employed Capital is generally measured by book value. WACC is the weighted Average of cost of Equity (generally measured by CAPM) and cost of Debt. 4. EVA as a performance measure If managers are told that their per

20、formance is measured by EVA and compensation is liked to that, they would try to improve EVA by doing one or more of the following. A. Improve returns with the existing Capital B. Employ Capital productively C. Reduce

21、 the capital cost When managers do one or more of the above the value of the firm increases. So improving EVA theoretically improves the value of the firm and hence is a good measure of managerial performance Whether t

22、hey are contemplating entering new markets, setting product prices, adding new service lines, or making an acquisition, managers need a way to value the alternatives and choose the ones that will produce highest value

23、to the firm. Cash flow analysis can help them to do that, but EVA can help them more (Bhalla, 2004). 5. EVA and the Market Value Added (MVA) As noted earlier, the major attraction with EVA is that it is linked to the

24、 value of the firm and hence capable of signaling the value creation or otherwise of it. 3 ANOPAT is derived by adding back to the reported net operating profit the non cash items such as amortization of goodwill increa

25、se in bad debt reserve, increase in capitalized R & D costs etc…. To facilitate quick understanding, its simplest form is used. Lokanandha Reddy Irala & Dr. Raghunatha Reddy