Asian Journal of Research in Business Economics and Management
Year : 2014, Volume : 4, Issue : 4
First page : ( 138) Last page : ( 152)
Online ISSN : 2249-7307.

Value Added Statement – An Innovative Dimension of Financial Performance Measurement - A Case Study of Steel Authority of India Ltd. (SAIL)

Vijayalaxmi B, Srikanth Potharla

Assistant Professor, Department of Commerce, Post Graduate College, Constituent College of Osmania University, Secunderabad, A.P., India

Online published on 15 April, 2014.

Abstract

Corporate reporting is undergoing significant changes in the recent past. Presentation of Financial Performance of firms in the form of ‘Value Added Statement’ has become a common practice in India. ‘Value Added Statement’ provides a way of understanding the role of various stakeholders of a corporate entity in creating and maintaining ‘Value Addition’. A firm can survive without profits in the short run and its existence will become detrimental in the long run, when it cannot generate ‘Value Addition’. In the light of growing importance of ‘Value Added’ concept as a performance evaluation metric, a modest attempt has been made in the present study to examine the impact of share of ‘various contributors of Value Addition’ on the profits of the select company. The results of the study highlights the fact that all the contributors of Value Addition have significant impact on the profits of the company. However, comparatively share of share capital contributors has most impact on the profits of the company followed by retained earnings. It indicates that greater ‘Value Addition’ can be possible by issuing new share capital rather than by plough back of Earnings. Share of ‘debt capital contributors’ has insignificant impact on the profits of the company.

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Keywords

Value Added Statement, Financial Performance Measurement, Corporate Reporting, Regression analysis.

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