外文翻譯---從一般角度看經(jīng)濟(jì)增值-全文預(yù)覽
【正文】 ed with returns generated by assets with similar risk profile (cross sectional analysis) Similarly return on investment for the current period should be pared with returns generated in past (time series analysis). A firm creates value only if it is able to generate return higher than its cost of capital. Cost of capital is the weighted average cost of equity and debt (WACC). The performance of a firm gets reflected on its valuation by the capital market. Market valuation reflects investor’s perception about the current performance of the firm and also their expectation on its future performance. They build their expectations on the estimated growth of the business in terms of return on capital. This results in an incongruence between current performance and the value of the firm. Even if the current performance is better in relative terms, poor growth prospects adversely affects the value of the firm. Therefore any metric of performance, to be effective, should be able to not only capture the current performance but also should be able to incorporate the direction and magnitude of future growth. Therefore the robustness of a measure is borne out by the degree of correlation the particular metric has with respect to the market valuation. Perfect correlation is impossible because as shown by empirical research fundamentals of a pany cannot fully explain its market capitalization, other factors such as speculative activities, market sentiments and macroeconomic factors influence movement in share prices. However the superiority of a performance metric over others lies in providing better information to investors. Metrics of performance have a very important and critical role not only in evaluating the current performance of a firm but also in achieving high performance and growth in the future. The metrics of performance have a variety of users, which include all the stakeholders whose well being depends on the continued well being of the firm. Principal stakeholders are the equity holders, debt holders, management, and suppliers of material and services, employees and the endusers of the products and services. Value creation and maximization depends on the alignment of the various conflicting interests of these stakeholders towards a mon goal. This means maximization of the firm value without jeopardizing the interests of any of the stakeholders. Any metric, which measures the firm value without being biased towards any of the stakeholders or particular class of participants, can be hailed as the true metric of performance. However it is difficult, if not impossible, to develop such a metric. Most of the conventional performance measures directly relate to the current ine of a business entity with equity, total assets, sales or similar surrogates of inputs or outputs. Examples of such measures are return on equity (ROE), return on assets (ROA) and operating profit margin. Each of these indices measure a different aspect of performance, ROE measures the performance from the perspective of the equity holders, ROA measures the asset productivity and operating profit margin reflects the margin realized by the firm at the market place. The ine figure in itself is dependent on the operational efficiency, financial leverage and the ability of the entity to formulate right strategy to earn adequate margin in the market place. It is important to note that none of these measures truly reflect the plete picture by themselves but have to be seen in conjunction with other metrics. These measures are also plagued by the firm level inconsistencies in the accounting figures as well as the inconsistencies in the valuation methods used by accountants in measuring assets, liabilities and ine of the firm. Accounting valuation methods are in variance with the methods that are being used to value individual projects and firms. The value of an asset or a firm, which is a collection of assets, is puted by discounting future stream of cas
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