Explaining Necessary Conditions of Value Creation Using Shareholder Value Creation Process
Arash N. Khalili, Amir Albadvi, Hojat Tayaran
Abstract
Arash N. Khalili, Amir Albadvi, Hojat Tayaran
Abstract
Shareholders value creation is the most important goal of a company. Recent studies illustrated that just one seventh of companies are able to create long term shareholder value. In this paper, the sources of value creation has been analyzed, 11 main sources has been discovered. These sources have been analyzed by their sustained shareholders and the process of value creation has been offered. Finally, the required conditions in creation of economical value have been extracted. It is shown that for creating value and making economical profit, at least, one of the value creation factors should be enforced in such a way that do not disturb other factors. If these conditions do not exist, then shareholder value growth would not happen.
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Shareholders value creation is the most important goal of a company. Recent studies illustrated that just one seventh of companies are able to create long term shareholder value. In this paper, the sources of value creation has been analyzed, 11 main sources has been discovered. These sources have been analyzed by their sustained shareholders and the process of value creation has been offered. Finally, the required conditions in creation of economical value have been extracted. It is shown that for creating value and making economical profit, at least, one of the value creation factors should be enforced in such a way that do not disturb other factors. If these conditions do not exist, then shareholder value growth would not happen.
Key concepts: Shareholder, Shareholder value, Value creation, Value (mathematics), Business, Profit (economics), Business value, Economic Value Added