Is REVA a Better Predictor of Shareholders\' Value? A Study of Pakistani Listed Cement Companies

The effectiveness of traditional methods of measuri ng organizational financial performance is least in practice. Theorists have put forward contemporary fi nancial performance measures but their significance is still under discussion by the researchers. In this study, the r elative significance of modern measures of financia l performance like REVA and EVA and traditional accounting-based measures is undergone for the cement sector of Pakistan using d ata from 2006 to 2014. After using descriptive statistic , correlation analysis, and regression estimation technique, the resultsindicate the irrelevance of ROE, ROA,and EPS as measures of financial performance while EVA as a modern measure was found to have a significant link with the long-term organizational performance. Lastly, REVA was lso found asinsignificant and therefore irrelevant perf ormance measure.However, the relative explanatory po wer of EVA is also weak implying that future investigations in thi s domain of knowledge should be considered with a vie w to explain long-term value of the organizations.