About some difficulties with interpreting and measuring corporate performance
AbstractCorporate performance constitutes one of the most important issues of both theory and practice in many areas of economics. The paper deals with the problem of multiplexity of corporate performance and the diversity of ways in which the term is interpreted in the literature. It also attempts to formulate a versatile definition, while organising the discrepancies in this area. Therefore, the way corporate performance is understood in the theory and practice of industrial economics was compared with the approach applied in corporate finance. The difficulties in defining corporate performance unambiguously result in a number of problems with measuring it and, as a result with conducting a fully objective and reliable evaluation of an economic entity. These problems also result from the imperfections of financial ratios as instruments used for measuring and characterising corporate performance. The study presents the idea of financial ratios and their main classification systems, as well as features the most important limitations of their application.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by National Bank of Poland, Economic Institute in its journal Bank i Kredyt.
Volume (Year): 42 (2011)
Issue (Month): 5 ()
Contact details of provider:
Postal: 00-919 Warszawa ul. Świętokrzyska 11/21
Phone: (0-22) 653 10 00
Fax: (0-22) 620 85 18
Web page: http://www.bankikredyt.nbp.pl/menu_en.aspx
More information through EDIRC
corporate performace; industrial organisation; corporate finance; financial ratios;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gabriel Hawawini & Venkat Subramanian & Paul Verdin, 2003. "Is performance driven by industry or firm-specific factors? A new look at the evidence," ULB Institutional Repository 2013/14188, ULB -- Universite Libre de Bruxelles.
- Gabriel Hawawini & Venkat Subramanian & Paul Verdin, 2004.
"The home country in the age of globalization: how much does it matter for firm performance?,"
ULB Institutional Repository
2013/14190, ULB -- Universite Libre de Bruxelles.
- Hawawini, Gabriel & Subramanian, Venkat & Verdin, Paul, 2004. "The home country in the age of globalization: how much does it matter for firm performance?," Journal of World Business, Elsevier, vol. 39(2), pages 121-135, May.
- Kessides, Ioannis N, 1990. "Internal versus External Market Conditions and Firm Profitability: An Exploratory Model," Economic Journal, Royal Economic Society, vol. 100(402), pages 773-92, September.
- Burgstahler, David & Dichev, Ilia, 1997. "Earnings management to avoid earnings decreases and losses," Journal of Accounting and Economics, Elsevier, vol. 24(1), pages 99-126, December.
- Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
- Caloghirou, Yiannis & Protogerou, Aimilia & Spanos, Yiannis & Papagiannakis, Lefteris, 2004. "Industry-Versus Firm-specific Effects on Performance:: Contrasting SMEs and Large-sized Firms," European Management Journal, Elsevier, vol. 22(2), pages 231-243, April.
- Charoenwong, Charlie & Jiraporn, Pornsit, 2009. "Earnings management to exceed thresholds: Evidence from Singapore and Thailand," Journal of Multinational Financial Management, Elsevier, vol. 19(3), pages 221-236, July.
- Schmalensee, Richard, 1985.
"Do Markets Differ Much?,"
American Economic Review,
American Economic Association, vol. 75(3), pages 341-51, June.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
- Sam Peltzman, 1977.
"The Gains and Losses From Industrial Concentration,"
NBER Working Papers
0163, National Bureau of Economic Research, Inc.
- Peltzman, Sam, 1977. "The Gains and Losses from Industrial Concentration," Journal of Law and Economics, University of Chicago Press, vol. 20(2), pages 229-63, October.
- Peter Walton, 1997. "The true and fair view and the drafting of the Fourth Directive," European Accounting Review, Taylor & Francis Journals, vol. 6(4), pages 721-730.
- Anita M. McGahan & Michael E. Porter, 2002. "What Do We Know About Variance in Accounting Profitability?," Management Science, INFORMS, vol. 48(7), pages 834-851, July.
- Claver, Enrique & Molina, José & Tarí, Juan, 2002. "Firm and Industry Effects on Firm Profitability:: a Spanish Empirical Analysis," European Management Journal, Elsevier, vol. 20(3), pages 321-328, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sylwia Roszkowska).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.