Value based finacial performance methods to the capital structure of firms and application at ISE

Within the context of changing dynamics of business and complicating structures of modern economy, firms face the challenge to deal with demanding conditions of circumstances of competition along with the passage of time.It has become an obligation for organizations to utilize organizational resources effeciently and accurately in the light of constraints imposed by increasing qualitative and quantitative traits of competitors, developing expectations of consumers, social responsibilities to be realized, environmental groups? pressures and expectations of investors, respectively.The term ?maximizing firm?s market value? as put forth as a financial objective in the twentieth century requires both profit firms and nonprofit firms to measure performance in an accurate and excise manner.The correct measurement of firms? performance and inclusion of the previous into the decision making processes are more complicated than so-named traditional approaches basing themselves on accounting data and financial tables at an incommensurate level.Due to the stated reasons, in addition the fact that traditional methods do not lose their significance, instead of concentrating on traditional approaches focusing upon only firms and their performances, value based performance measurement methods ,which take value added of capital and expectations of share holders under consideration , attempt to fill in the gaps.In this study, `Value Based Performance Indicators,? inclusive of terms as Economic Value AddedTM, Market Value AddedTM, Cash Value Added, Return of Investment is substantially elucidated and elaborated.By means of setting relationships with the value based financial performance methods and capital structure of firms, these relations? impact within firms involved in Istanbul Stock Exchange Market is analyzed.There are cons associated with the value based performance measurement methods as inherent in any method. In such regard, this work attempts to determine the inherent gaps and to present remedies to tackle with the deficiencies identified.