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Paper Information

Journal:   FINANCIAL RESEARCH   SPRING-SUMMER 2010 , Volume 12 , Number 29; Page(s) 0 To 0.
 
Paper: 

AN ANALYTICAL SURVEY OF INFLATION DISTORTIONS TO ECONOMIC VALUE ADDED AND THE FIRM’S FINANCIAL CHARACTERISTICS

 
 
Author(s):  JAHANKHANI A., SOHRABI J.
 
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Abstract: 

The performance valuation of the economic enterprise in order to confidence of limited resources’ optimum allocation is important affaire and as long as it isn’t use of appropriate indicator for performance measurement and stock value of the firm its value not toward reale value and capital doesn’t allocate truly. This subject is more sensitivity in inflation condition. The goal of this research is، study of inflation distortion to economic value added (EVA) that is an indicator of the firm’s valuation and present adjusted models، compare unadjusted EVA to adjusted EVA and their components and examine inflation’s effect and financial characteristic on inflation net distortion. The results of our study that is estimated with use of pairs test and panel data regression model show unadjusted EVA and its component has significant difference in compare to adjusted EVA and its component، and there is no reason to assume that upwards and downwards distortions are offsetting. Also level of the distortions will depend greatly on degree of leverage (Net Debt Ratio) and amount of real assets(Fix Asset Ratio) and inflation rate.

 
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