Research On Financial Performance Evaluation Based On EVA

In order to obtain better economic benefits,enterprises will strengthen financial management and carry out evaluation based on their own financial performance,so as to better understand their own financial performance.In traditional financial performance evaluation,net profit is often used as the main financial index as the evaluation method.However,too single financial performance evaluation method is easy to ignore the common principal-agent problem of enterprises,and can not better measure the cost of equity capital of enterprises.Therefore,the original way of financial performance evaluation is subjective and cannot provide objective and real reference for enterprise management.Due to the impact of the COVID-19 pandemic,global economic growth has slowed down and international oil prices have fluctuated,making the Chinese oil industry face great challenges.Based on this background,it is more necessary for petroleum enterprises to understand their own enterprise value and business performance,and formulate targeted future development strategies.EVA financial performance evaluation method can effectively avoid subjective bias,evaluate financial performance objectively,and help enterprises realize value maximization.Therefore,in the process of evaluating the financial performance of enterprises,EVA evaluation method should be used as the performance evaluation method.This paper first defines the related concepts involved in the paper,explains the related concepts of financial performance and economic added value,summarizes the relevant theories,and points out the disadvantages of traditional performance appraisal and the advantages of EVA evaluation method and the key points of application.Secondly,combined with the current financial situation of Company A,this paper analyzes the problems existing in the process of performance evaluation from four aspects: solvency,operation ability,profitability and development ability,and discusses the feasibility and necessity of financial performance evaluation of Company A with EVA evaluation method.Thirdly,the EVA value of A company is calculated by combining the corresponding accounting accounts of A company,which reflects the advantages of EVA evaluation method: rationalizing financial performance evaluation indicators,considering the cost of equity capital,and truly reflecting enterprise performance.Finally,combined with the case of A company’s financial performance evaluation,it summarizes the countermeasures and suggestions to improve the effectiveness of EVA financial performance evaluation,including: emphasizing the advantages of EVA financial performance evaluation,making up for the deficiencies of EVA financial performance evaluation,and dynamically adjusting the evaluation indicators of EVA financial performance.This paper uses EVA evaluation method to evaluate the financial performance of A company,explains the advantages of EVA financial performance evaluation method,and expounds the countermeasures and suggestions to improve the effectiveness of EVA financial performance evaluation.It can provide reference for company A’s financial performance evaluation,but also for other enterprises to better combine their own characteristics to develop performance evaluation,and improve the management capacity of enterprises in our country.