Abstract:
The objective of this study was to analyse the value drivers of manufacturing firms
listed on the Johannesburg Stock Exchange. Unique performance measurement
tools and processes exist in the manufacturing industry. The creation and
measurement of shareholder value however, should be the goal of any manager in a
firm. In order to optimise shareholder value creation, it is necessary to identify value
drivers that management can control. A multiple regression analysis was used to
identify the significant micro-value drivers of South African manufacturing firms. It
was found that the value drivers that are significant in the explanation of shareholder
value are the cost of goods to sales percentage, the degree of manufacturing
leverage and the capital investment in plant and equipment. Value-based
management, incorporating these value drivers, can guide manufacturing managers
towards optimal shareholder value creation.
