Value Based Financial Performance Measurements: A Conceptual Framework

The phenomenon of "globalisation" has made it possible to do business anywhere in the world by removing barriers to corporate trade and financial investment. As a result, firms have greater opportunities for development and can effectively achieve higher performance. Depending on the spread of the technology, the added value achieved is more important to investors than the profitability of the investment. It is difficult to determine whether the investment will increase shareholder value and wealth using the traditional "earnings-based" approach, which takes into account the company's current and past performance data. These limitations have allowed measurements based on a value-based management strategy to gain acceptance in the research community. This study discusses the factors that make value-based measures superior to traditional techniques. In addition, explanatory and comprehensive information is provided on all methods that can be used in determining value.