From: Anders Ekeland (anders.ekeland@online.no)
Date: Thu Dec 19 2002 - 14:07:45 EST
A couple of questions from a lurker: Does anybody know a informative/critical/radical/Marxist analysis of performance measures like: a) Operating profits b) Return on assets (RoA), return on stock (RoS) c) Tobin's Q (Q) (operationalised as market value of shares to book value of assets) Why are the three measures Q, RoA and RoS so weakly correlated, less than 0.3 in Norway? - Are book values a defunct measure of the value of a firms capital? - The best indicator of the profit rate using accounting data is, Nominal Operating profit after/before taxes divided by book value of assets? Or am I on the wrong planet? All references and hints are very welcome! Context: -------- The information is primarily to be used in a critique of main-stream corporate governance theory, particularly their performance measure. In the literature the most common measure of performance is Tobin's Q (actually market-to-book value), but that's basically because it gives the most significant results in uni/multivariate regressions and not for any deeper theoretical or data quality reason. Kind regards Anders Ekeland Norway
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