Financial performance measures and value creation: the state of the art

The choice of� financial performance measures is one of the most critical challenges facing organizations. The accounting-based measures of financial performance have been viewed as inadequate, as firms began focusing on shareholder value as the primary long-term objective of the organization. Hence, value-based metrics were devised that explicitly incorporate the cost of capital into performance calculations.� Despite the increasing emphasis on these value-based measures, no definitive evidence exists of which metric works better than others, and on the extent to which any of them is� superior to traditional accounting measures.
In this scenario, the objective� of this book is contributing to the ongoing dialogue on the appropriateness of different financial performance measures, by providing a systematic and updated review of the major value-based measures, by highlighting their respective strengths and weaknesses� and �by comparing the main international empirical evidence on their effectiveness. This book can� be a powerful tool for guiding managers and graduate students in the "tangled forest" of� the existing metrics, by providing them with the quick, but adequate knowledge for consistently adopting them.