Analysis of Financial and Investment Activities Based on Determination of Economic Value Added (on the Example of “Kazakhstan Temirzholy” Joint Stock Company)

One of the most important areas in evaluating company's effectiveness in corporate governance is assessing its investment performance. This is especially important for holding companies with multibillion differentiated investments. The most commonly used investment evaluation tools such as IRR, NPV, PI, etc. are not applicable for past investments. This study investigates whether EVA as a measure for managerial performance evaluation help actually improve organization’s performance. The conclusions obtained on the basis of assessments of the effectiveness of corporate governance show that managers make more prudent investment and operating decisions after the adoption of EVA as their performance evaluation metric. In addition, this study provides evidence that the EVA score is the most reliable indicator to show the effectiveness of implementation of the company's investment activities. In particular, it is useful for large companies, such as holdings