Variable

Label

Definition and measurement

Value Added (VA)

VA = Output-Input

VA = IN + HC + D + A + T + I

IN = net income after tax

HC = staff costs

D = depreciation

A = amortization

T = taxes

I = interests

Output refers to net revenues generated

Input refers to expenses incurred excluding staff benefits.

Relational Capital (RC)

Total net tangible assets

Capital that enables HC and SC to create added value ( Nuryaman, 2015 ). Refers to capital employed equal to the book value of net total assets.

Human Capital (HC)

All costs invested in staff

Knowledge possessed by staff.

Refers to wages, salaries, bonuses, social security expenses, insurance, end-of-service benefits and any other renumeration.

Structural Capital (SC)

SC = VA-HC

Knowledge possessed by the firm. Excludes staff costs from VA to determine the value added by structural elements

RC Efficiency (RCE)

RCE = VA/CE

RCE coefficient describing the value-value-created by each dollar spent on capital employed

HC Efficiency (HCE)

HCEVA/HC

HCE coefficient describing the value added generated by each dollar spent on HC

SC Efficiency (SC)

Intellectual Capital Efficiency (IC)

Value-added Intellectual Coefficient VAIC

SCE = SC/VA

ICE = RCE + HCE + SCE

VAIC = RCE + HCE + SCE

SCE coefficient describing the value added generated by SC.

ICE coefficient describing the value created by intangible asset efficiency.

Overall value-added efficiency generated by intellectual coefficient proxied by IC. A greater VAIC represents greater efficiency in IC employed, and thus greater value generated to the firm ( Yang, 2019 ).

Firm Size

SIZE = (Log TA)

Firm size, to control for the effect of large and small firms on the regression model. Calculated by taking the logarithm for total net assets (TA).

Firm Leverage

LEV = (TD/TA)

Company indebtedness, to control for the effect of debt on the regression model. Calculated by dividing total debts (TD) by total net assets.

Return on Assets

ROA = Net Income/Total assets

Return on Equity

ROE = Net Income/Total Net Equity

Earnings Per Share

$\text{EPS}=\frac{\text{NetIncome}}{\text{Totaloutstandingcommonshares}}$

Net Profit Margin

$\text{NPM}=\frac{\text{NetIncome}}{\text{TotalRevenues}}$