Abstract: Measurement of shareholder value creation has been the issue of discussion all around the world. This study aims at presenting an extensive picture of how shareholder value is created as a background to measuring business performance. To help one understand the concept better, the researcher uses the example of Cadila Healthcare Limited, and analyses its shareholder value creation and business performance for a period of five years from 2002-3 to 2006-7.
Introduction: Creating value for shareholder is now widely accepted as a dominant corporate objective. Traditionally, the motive of business was to maximize profit or wealth. It resulted in unfair practices of business and exploitation of resources. With changing time, it is realized that the main motive for business should be social welfare or creating values for the stakeholders. They are more concerned with the ultimate wealth created for them by their enterprise during a specific period. In recent past, there has been considerable managerial interest in shareholders’ value and its management. Important reason for the increased interest is the shift in focus from accounting profit to economic profit. Click here to read more…
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