A Study of Literature Review on Financial Performance of Selected & Listed Chemical Companies With Reference to Eva and Mva

The assessment of financial performance assumes essential value creation potential for the long-term sustainability of firms with specific references to capital-intensive and environmentally burdened sectors, such as the chemical industry. Traditional financial performance indicators like Return on Assets (ROA), Return on Equity (ROE), Earnings per Share (EPS), or Net Profit Margin (NPM), have been considered long metrics of measuring profitability and efficiency by corporations. Generally, these indicators fail to describe the visible economic value being delivered to shareholders since the cost of capital or the market expectation is excluded. In recent years, value-based performance measures-most notably EVA and MVA- have gained importance owing to their ability to address such limitations concerning a more complete picture of financial health and shareholder wealth creation.This literature presents a qualitative review on the financial performance of selected listed chemical companies, particularly concentrating on EVA and MVA as the primary evaluation tools. Kinds and numbers of scholarly articles, industry studies, and reports have been included in this paper, to understand the applicability, merits, and demerits of these parameters. This paper also explores how non-financial factors such as intellectual capital, Environmental Social and Governance (ESG) practice, audit quality, etc. represent influencers of the financial performance and value creation phenomena in the chemical industry. The conclusion of this review finds that while EVA and MVA lend themselves to much deeper understanding of wealth generation and market perception, they still have not been widely adopted or consistently applied in the chemicals industry, especially within developing countries like India.Also, there is the growing literature on intangibles and their importance and sustainability-related practices as driving performance in firms nowadays. Intellectual capital (i.e. human, structural, and relational capital) has also been shown by various studies to have a positive correlation with both EVA and MVA. Again, it is likely going to be profitable in market valuation and earnings from long-term operations for firms with good ESG practices as compared to the market. Quality of Audit, especially in terms of independence, expertise and governance, comes to light as one of the essential factors determining the accuracy and reliability of much financial reporting. While thus also affecting investor trust and financial outcomes.The study is limited in many respects. This being a literature review, most of it is theoretical with no empirical testing or primary data analysis. The findings are also from previously published research, which might not do justice to the most recent changes in financial practices or market conditions. The scope is also limited to what has been reported in literature concerning listed chemical companies and does not account for the performance of unlisted companies as well as companies in other geographies.