Interrelationships Among Corporate Performance Measures

Firm Value Maximization as the objective function will guide managers in making the optimal business tradeoffs. While firm value maximization as a goal is widely accepted; not many agree on one way of achieving itTraditionally corporate performance is measured using some variant of historical accounting income like Net Profit, EPS or some measures based on the maximizing accounting income will lead to firm value maximization.There is growing criticism about the linkage of traditional measures and firm value and their ability to be consistent predictors of firm value creation. This lead to the mergence of value based performance measures This paper attempts to provide some understanding of the interrelationships among select corporate performance measures in the Indian setting