The Relation Between Internal Performance Measures and Market Performance Measures: Evidence from Amman Stock Exchange

Abstract

This study aims to investigate the relation between the internal performance measures that depending on the accounting numbers (Return on Assets, Return on Equity and Earning per Share) and external performance measures that depending on market valuation for the firm, we used Market Value Added (EVA) that considered an important measure for owners wealth and wealth growth, depending on the Jordanian banks information's, the sample consists of thirteen banks during the study period 2005-2007.

After conducting the statistical tests like correlation and regression and depending on T. test results, the research found a relation between the internal performance measures and MVA as external performance measure , that relation was vary from variable to another, and wasn't significant except when studying Earning per Share (EPS) which had a significant relation with Market Value Added (EVA), these results may give an indicator to where the Jordanian investors pay there attention (earning not operational performance).