Financial analysis of Tehran stock exchange (TSE) based on economic value added (EVA) during years 2001–2004

Economic Value Added (EVA) is a practical method of estimating the economic profit that is earned, as opposed to the accounting profit. This way of looking at financials enables companies to truly understand if they are profitable because they manage assets (taub, 2003). Proponents of EVA provided evidence to establish this method as a superior performance measurement and incentive compensation system and claimed that it is really better to use EVA than traditional accounting performance measures such as earnings, EPS, ROI or ROE (Stewart, 1991; Tully 1993; Stern et al., 1995; Ehrbar, 1998).

The purpose of this study is to investigate the correlation relationship between Economic Value Added (EVA) during years 2001 to 2004.

The information regarding 60 companies is collected from Tehran stock exchange (TSE) that includes the years from 2001 to 2004.Based on of One-Sample Kolmogorov-Smirnov Test, distribution of research data is not normal. The result of Kruskal-Wallis Test indicates which there is meaningful difference between averages of economic value added (EVA) during years 2001 to 2004.

Also, the analysis of Spearman's correlation indicates which there is a meaningful correlation between economic value added (EVA) (2001, 2003) & (2001, 2004) and (2002, 2004) but There isn't a meaningful correlation between economic value added (EVA) (2001, 2002) & (2002, 2003) and (2003, 2004) on Tehran stock exchange (TSE) during years 2001 -2004.