Eva versus Other Performance Measures

Create value not only intended to satisfy shareholders. This is also the way to ensure the ability of the company to ensure its sustainability and finance its growth. The company will not attract new capital if it destroys value. "The concept of value creation is none other than the intersection of strategy (create value) and technique (evaluate the company)"(Powilewicz, 2002). The basic idea behind the different measures of value creation by a company is that a company creates value for its shareholders when the return on capital exceeds the cost of different sources financing used or the cost of capital. We are interested in analyzing the difference between EVA and other measures of performance in explaining on firm value on a sample of 82 French firms that compose the SBF 250 indexes, from 1999 to 2005. Thus, we have noticed that the CF is the best measure of performance followed by BN, BR and EVA. Hence, the finding of Stern Stewart, of the supremacy of the EVA is not confirmed in our context.