Research On Financial Performance Evaluation Of T Oil Company Based On EVA

Nowadays,with the rapid development of world economy,effective financial performance evaluation is indispensable for enterprises to improve economic benefits.However,in the past financial performance evaluation,enterprises adopt the financial index with net profit as the core,which has many defects,such as ignoring the cost of equity capital of enterprises,principal-agent problems,etc.,which will lead to the lack of objectivity of financial performance evaluation system,and can not meet the needs of enterprise competition.In recent years,due to the impact of COVID-19,global economic growth has slowed down and international oil prices have dropped.The oil industry is facing severe challenges.It is imperative to understand the business performance and corporate value of enterprises.Therefore,in order to effectively and scientifically evaluate the financial performance of enterprises,enterprises should fully implement EVA.EVA is a method that can effectively avoid artificial manipulation,and its evaluation results are more objective than traditional evaluation methods,which can help enterprises maximize shareholder wealth and enterprise value in their business performance.Taking T Oil Company as an example,this paper firstly defines the related concepts of EVA and financial performance,and puts forward the relevant theories of EVA based financial performance evaluation.Secondly,the financial situation of T Oil Company is analyzed from four aspects of solvency,operating capacity,profitability and development capacity.Thirdly,it puts forward the necessity of using EVA to evaluate the financial performance of enterprises,adjusts the related accounting items,calculates the EVA value,and compares the EVA value with the traditional financial performance evaluation method,showing the superiority of EVA.EVA can rationalize the financial performance evaluation index,consider the cost of equity capital,overcome the disadvantages of principal-agent problem and reasonably reduce the proportion of equity capital,which provides a reference for applying EVA in T Oil Company’s financial performance evaluation.Finally,relevant suggestions are provided for T Oil Company to improve its financial performance evaluation,including: actively introducing EVA for financial performance evaluation,improving the incentive mechanism for financial performance,rationalizing the capital structure and improving the utilization efficiency of assets.