The purpose of the research methodology is collecting and processing the data correctly, and also achieving to reliable results. This part of the paper explains main of question research, purpose of study, scope of study, and methodology.
There are different measures for evaluating of company performance. Economic value added (EVA) is one of the most important measures for evaluation of company performance. The main research question is: which of Accounting measures (ROE and ROA) and economic measures (EVA, REVA, and EVA momentum) have a greater relationship with stock return in Bursa Malaysia? So, the purpose of the study is to examine the relationship between EVA, REVA, EVA Momentum, ROA, and ROE with stock return in Bursa Malaysia.
We will choose the public companies accepted in Main market of Bursa Malaysia. The sample of the companies include most companies listed in Bursa Malaysia (and wich data available) over the period 2001 – 2010. The historical or secondary data will comprise companies’ financial statement and will use to calculate EVA, REVA, EVA momentum, ROA, and ROE. The data will abstract from the income statement, balance sheet, and financial highlits, available from KLSE RIIAM information system (KLSE-RIS) website, Bursa Malaysia website, Universiti Malaya (UM), and Universiti Potra Malaysia (UPM). Klse RIS is considered as the major of data for the study since most of the data is available from their website. The daily share price of the companies will base on Bursa Malaysia’s trading closing price. This information is drawn from the Hydrasystem available online at the library of Universiti of Malaya, Kuala Lumpur.
The judgement sampling for non-random sampling will be used instead of random sampling since judgement is used in selecting the sample. For this study all public listed companies in Bursa Malaysia that their data is available will be selected as a sample of study. The large numbers of companies will expect to make the study more transparent and representative of across section of companies in Malaysia. The scope of the study only includes companies listed in Bursa Malaysia with availablility of data through over the period of 2001- 2010. The company must be actively traded on Bursa Malaysia, and shoud not be classified as PN 4 or PN 17 companies. It must have completed a full accounting period or 12 months business operation for each year and the accounting period must be consistent and have the same year-end throughout the 12 years periods.
We will use secondary data, and for testing the hypothesis will use multivariate regression, correlation coefficient, coefficient of determination and will use SPSS and Eviews. The study involves five independent variables (EVA, REVA, EVA Momentum, ROA, and ROE) and one dependent variable (stock returns).
The proposed model provides the moderating link between economic measures (EVA, REVA, and EVA Momentum) and accounting measures (ROE and ROA) with stock returns to evaluation of company performance. The authors’ intention is to fill up the gap about the lack of research on economic and accounting measures in Bursa Malaysia. There is no evidence conclusive that supporting whether EVA and EVA- related measures are associated with financial performance. In addition, EVA and EVA- related research in the public company has been limited. EVA momentum is a new performance measures that referred by Stewart in 2009. In Malaysia we don’t find any research about EVA momentum and REVA. There is limited research about EVA in Malaysia. This study extends previous EVA research and is the first known study that empirically examines EVA momentum and REVA as a performance measure in the Bursa Malaysia. Furthermore, the study will be carried out resulting from the proposed model to investigate the role of accounting and economic performance measures to evaluation of company performance and value creation. It is expected; this study contributes to clarifying the relationship between accounting and economic measures with stock return as a company’s performance and could help to public companies’ owners-managers in their making decision and increasing their performance.