THE EFFICIENCY OF THE VALUE CREATION MODEL IN THE MANUFACTURING INDUSTRY IN THE CZECH REPUBLIC
THE EFFICIENCY OF THE VALUE CREATION MODEL IN THE MANUFACTURING INDUSTRY IN THE CZECH REPUBLIC

Author(s): Petr Suchánek, Martin Štěrba
Subject(s): Business Economy / Management
Published by: Masarykova univerzita nakladatelství
Keywords: value creation model; EVA ratio; financial analysis; performance; manufacturing industry;
Summary/Abstract: The subject of this article is determining the efficiency of the Value Creation Model (VCM) in the manufacturing industry in the Czech Republic. The aim of the article is to identify and compare the ability of VCM to distinguish companies creating value or destroying value in the manufacturing and food industries. VCM has been designed on the research basis of food enterprises, where its explanatory power is very good. The question then becomes: what explanatory power does it have in other sectors? To determine and compare predictive ability, VCM values will be calculated for selected companies from the manufacturing industry and on that basis enterprises will be classified as enterprises creating or destroying value or enterprises in the so-called grey zone. The EVA ratio will be also calculated for the same enterprises and used to divide them into enterprises creating and destroying value. Finally, the consensus of classification by the VCM index and EVA will be determined for enterpriseswithin the sector and this will be compared with the level of agreement in food enterprises, which will serve as a control sample. So the efficiency of VCM within selected sectors will be determined and at the same time it will be possible to compare this efficiency between these sectors.

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