Measuring true profitability of public listed companies in Sarawak

Chow, Soon Fah. (2012) Measuring true profitability of public listed companies in Sarawak. [Final Year Project Report] (Unpublished)

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Abstract

The purpose of this study is to measure the true profitability of public listed companies in Sarawak. The traditional measurement such as EPS, ROI and ROE that commonly used by today companies has some limitations. These measurements are seriously biased measures of true profitability. In contrast, Economic Value Added (EVA) is an unbiased measure of true profitability as EVA is including cost of equity in calculation which could lead to a more accurate result. EVA was developed by Stern Stewart and Co. in 1982. It claims to have successfully eliminated financial and accounting distortions and provides a true measure of company’s success in driving shareholder value. A sample of 16 public listed companies in Sarawak traded on the Bursa Malaysia from 2004 to 2006 is used. The study is based on secondary data, and the balance sheet, income statements and other related data are obtained.

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