Financial Performance Evaluation Using Variants of Economic Value Added in Consumer Goods Industries Listed on the Iraqi Securities Exchange

Jothr Al-bunajim, Osama Abdulsalam; Ghobadi, Sara; Hussein, Abdulrazzaq Hamad; Sharifi Renani, Hossein

doi:10.22034/oajre.2025.552645.1154

Financial Performance Evaluation Using Variants of Economic Value Added in Consumer Goods Industries Listed on the Iraqi Securities Exchange

Document Type : Original Article

Authors

Osama Abdulsalam Jothr al-bunajim ¹

Sara Ghobadi ²

abdulrazzaq hamad Hussein ³

Hossein Sharifi Renani ²

¹ PhD student, Department of Economics, Isf.C., Islamic Azad University, Isfahan, Iran.

² Associate Professor, Department of Economics, Isf.C., Islamic Azad University, Isfahan, Iran.

³ Professor of Economics, Tikrit University, salahaldeen, Iraq.

10.22034/oajre.2025.552645.1154

Abstract

This study investigates the financial performance of consumer goods companies listed on the Iraqi Securities Exchange using Economic Value Added (EVA). EVA is introduced as a comprehensive metric of corporate profitability and shareholder value creation, as it explicitly incorporates the opportunity cost of capital. The findings indicate that EVA can help identify areas of underperformance and opportunities for improvement, ultimately contributing to enhanced shareholder value. Conventional accounting methods commonly employed to measure and analyze corporate financial performance have been widely criticized for their limitations. Accordingly, this research aims to examine the impact of three contemporary economic performance measures—Economic Value Added (EVA), Refined Economic Value Added (REVA), and EVA Momentum—on firms’ financial performance. Furthermore, it seeks to identify the measure with the highest explanatory power regarding financial performance through relative and incremental information content analyses. The results demonstrate that all Economic Value Added metrics exert a statistically significant influence on corporate financial performance. Moreover, REVA emerges as the most effective economic indicator for explaining and enhancing financial performance among the examined measures.

Keywords

Economic Value Added

EVA Momentum

Financial Performance

Consumer Goods Industries