Strategic Performance Analysis

Subject Areas : Journal of Investment Knowledge

Mohammad Jalili ¹ , Mousa Ahmadi ² , Elham Asgari ³

1 - Assistant Prof. of IAU, Abhar Branch
2 - Assistant Prof. of IAU, Abhar Branch
3 - M.A. of IAU, Abhar Branch

Received: 2013-05-05 Accepted : 2013-07-08 Published : 2013-07-08

Keywords: Financial Strategy Matrix, economic value added, Market Value Added, Sales Growth Rate, Sustainable Growth Rate,

Abstract :

Ultimate goal of each commercial company is rising in wealth of shareholders. Proper function increase Company’s value and ultimately increase the shareholder’s wealth. Companies can’t achieve their goals without any proper strategy and making strategy is a result of performance evaluation of different aspects. economic value added and cash management are two items of internal performance evaluation criteria and today’s  economic value added is considered as the best criteria for internal performance evaluation which is representative of shareholder’s wealth and it has close relation to market value added as an external index of value creation. Two dimensional matrix of financial strategy with a combination of cash management and economic value added considering to company’s position in each area, proposes four financial strategy objectives. In this research, position of food companies accepted in Iran Stock Exchange since 2001 to 2010 are defined in financial strategy matrix and considering to their positions in the matrix proper strategies are proposed for move to better position and ultimately relation between EVA, spread and difference between sales growth rate and sustainable growth rate with changes in MVA during ten years is investigated. Result of this research demonstrates that there is a meaningful relation between EVA and spread with changing MVA. But there is not meaningful relation between difference of sales growth rate and sustainable growth rate and changing MVA. Hence Food Companies accepted in Iran Stock Exchange must enlist other criteria for their own cash management and to evaluate their performance and taking proper financial strategies. Procedure of this research is linear regression analysis and spss software is used for hypotheses examination.