haku: @indexterm Corporate finance / yhteensä: 722
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| Tekijä: | Ramezani, C.A. Soenen, L. Jung, A. |
| Otsikko: | Growth, corporate profitability, and value creation |
| Lehti: | Financial Analysts' Journal
2002 : NOV/DEC, VOL. 58:6, p. 56-67 |
| Asiasana: | Earnings Profitability Financial performance Corporate finance Statistical methods USA |
| Kieli: | eng |
| Tiivistelmä: | Associating corporate performance and shareholder value creation with growth in earnings (or sales) has been the modus operandi in the investment industry. It has greatly influenced managerial compensation schemes and portfolio decisions. This study sheds light on the relationship btw. growth and performance by addressing two broad questions. First, what is the relationship btw. corporate profitability metrics, such as economic value added, and the company's earnings or sales growth rate? Second, does maximizing corporate profitability necessarily enhance shareholder value? Using multivariate analysis, it is shown that, although the corporate profitability measures generally rise with earnings and sales growth, an optimal point exists beyond which further growth destroys shareholder value and adversely affects profitability. |
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