A Study of Economic Value Added (EVA) and Market Value Added (MVA) of Hindustan Petroleum Corporation Limited

• Main Authors: Izhar Ahmad, Shabbir Alam, Mohammad Yameen
• Format: Article
• Language: Arabic
• Published: Research, Enlightment, Findings Accelerated Applications Development ( REFAAD) 2019-03-01
• Series: Global Journal of Economics and Business
• Online Access: http://www.refaad.com/Files/GJEB/GJEB-6-1-14.pdf
• ISSN: 2519-9285; 2519-9293

This study shows the importance of analysis of financial performance of Public Sector Undertaking. The concept of economic value added was given by the Stern Stewart and Co. in order to measure the surplus value created by investment in 1991. EVA is a modern technique to evaluate the financial performance of an entity. MVA is the sum total of all present values of future EVAs.This study measure the impact of liquidity, profitability and solvency on Economic Value Added and Market Value Added of Hindustan Petroleum Corporation Limited. This study is based on the secondary sources of data. The financial data of fifteen years of the HPCL has been taken for an appropriate analysis and interpretation of data to get conclusion for the present study as well as to forward the suggestions for the greater interest of the stakeholders. The independent variables of the study are current ratio, liquid ratio, gross profit ratio, net profit ratio, debt-equity ratio and interest coverage ratio. On the other hand economic value added and market value added are considered as dependent variables. In this study, researcher has used simple regression analysis on SPSS. It is concluded that gross profit ratio, net profit ratio, debt equity ratio and interest coverage ratio have a statistically significant influence on economic value added except liquidity ratios. The MVA was not found satisfactory during the study period. High fluctuations were recorded in MVA.