Original Research

An analysis of strategic performance measures of companies listed on the JSE securities exchange South Africa

JHvH de Wet, JH Hall
South African Journal of Economic and Management Sciences | Vol 9, No 1 | a1157 | DOI: https://doi.org/10.4102/sajems.v9i1.1157 | © 2014 JHvH de Wet, JH Hall | This work is licensed under CC Attribution 4.0
Submitted: 11 July 2014 | Published: 11 July 2014

About the author(s)

JHvH de Wet, University of Pretoria
JH Hall, Universiteit van Pretoria, South Africa

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Abstract

This study highlights the importance of economic profits (EVA) and their long-term effects on shareholder value (MVA). South African companies listed on the JSE were analysed and it is evident that the relative measure of internal performance (spreads) can be used to rank companies in terms of value creation. Individual companies and sectors were also placed on a financial strategy matrix, which evaluated companies according to spreads and cash management. The sales growth less the SGR percentage, was used to indicate cash management. Statistical tests (regression analysis) were done on the data to test the validity of the financial strategy matrix model. The results showed that there is a positive relationship between spreads and shareholder value, but sales growth less the sustainable growth rate does not contribute significantly to shareholder value. 

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Crossref Citations

1. Predictive power of economic-based performance indicators on shareholder value: Evidence from South African listed firms
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Investment Management and Financial Innovations  vol: 20  issue: 3  first page: 299  year: 2023  
doi: 10.21511/imfi.20(3).2023.25