Operating Performance Evaluation Of Listed Company From Investor Perspective

This dissertation constructed the evaluation model of operating performance of listed company from investor perspective, and investigated its application. The dissertation adopted the conception of special investor, which refers to minority shareholders and potential investors. Research into the evaluation of operating performance of listed company from the view of minority investors nowadays, provides remarkable theoretical value, and also has important practical meaning.Following the development of securities market in china, the operating performance of listed company has been the notable problem of securities investor, government, securities analysts and fund manager. How to appraise the achievement of listed company scientifically has been an important problem in investment theory. There are many theoretical evaluation models of achievement of listed company, such as evaluation of principal component model (Pan Yan, et al. 2000), factor analysis model (Feng Genfu, et al. 2001), catastrophe progression method (Zhu Shunquan, 2002), fuzzy evaluation model (Wu Runheng, eta al. 2004), multi-phase correlation coefficient method (Mei Guoping, 2004). Analyzing these models will find some defects more or less, which can be divided into two kinds, low operability and its scientific property. So, it is quite important and urgent to construct a scientific and operable theoretical model to direct the evaluation of operating performance of listed company for investors.From the view of minority investors to appraise the operating performance of listed company, in short its practical meaning is on one side can protect the profit of minority investors, protect their invest passion to insure the enough fund in capital market, on another side can make the listed company build up correct management idea, strengthen its idea of create merit for shareholders to promote the development of capital market of China in long term. Correlated survey data reveal that the there are many characters of minority investors in Chinese stock market, as huge member and strong impact; independence of investment and high dispersion; low diathesis and serious speculation; small funds and slow information. And also the information source of listed company is relatively limited for minority investors (only through public disclosure of the financial information report), and these, messages to a large extent are fake, and most minority investor do not have professional financial knowledge, the ability of using scientific information to support decision-making analysis is limited Therefore the most vast number of minority investor, which are the most vulnerable group in investors, their legitimate rights and interests can not be protected actually. Based on this demand, there have been developed several evaluation systems of operating performance of listed company, including integrity of the securities evaluation system, "Listed Companies" evaluation system, the state-owned capital performance evaluation system, "Shanghai Securities" evaluation system, "China Securities News" and the "new wealth" evaluation model, and so on as representative systems. All these practical evaluation method are scientific and rational more or less, but there are also some shortcomings, mainly reflected in the following aspects: first, the idea of evaluation is incorrect. The existing evaluation model neglected this aspect. Second, the evaluation procedure is unscientific. Most of the current evaluation method adopted the disclosed financial report of listed company as the main source of information, all calculation of financial index is based on financial reported data, although the financial reported data will be pretreated, it is aimed to remove extreme value, which in the current capital market environment it is clearly not enough. Third, the evaluation system is unreasonable. At present, the construction of the evaluation system of listed companies performance in China is defective, especially in the choice of the design of evaluation indicators and evaluation method. It is precisely these limitations, resulting in the application of these methods is subject to a wide range of investors questioned. Such as "China's listed companies creating value (EVA) Ranking" launched by "Financial" magazine in the August 2002, which induced a wide range of disputes, the most noticeable is that because Yin Guang Sha which made false accounts is ranked as 14^th.Based on the above theoretical and practical significance of this paper, the purpose of the study was review the existing literature, exert to economics, management, finance, accounting and other theories, summarize and use the fruit of western research on the field of operating performance evaluation of company in the last century, start from the historical evolvement of operating performance evaluation of companies, take operating performance evaluation of listed company as background, on the basis of existing study on this, put forward a evaluation model of operating performance of listed company from the view of investors, try to provide a angle and reference for the exchange and practical development for operating performance evaluation of listed company in China.This paper combined both theoretical and practical study, based on investor perspective, asserted to economics, management, accounting and finance, etc. theory, studied on the evaluation of the performance of listed companies. In particular, the idea of this paper are as follows: first, to define the conception of operating performance of listed companies and operating performance evaluation, fix the view of investors and review the existing research results. Secondly, review the historical evolution of operating performance evaluation of company, analyze its status. Furthermore, carry an in-depth study of its theoretical foundation, sum up the foundation theory and assistant theory of operating performance evaluation of listed companies. Considered the situation of capital market and the listed company in China, through questionnaire investigation, constructed the evaluation model of operating performance of listed company from the view of investors. Then, the papers according to the financial report of listed company in Banking industry and related data, appraise the operating performance of listed company in Banking trade, get the result to test its scientific property and operability. Finally, pursuant to the evaluation conclusion and the result of the test of the model, make corresponding suggestions to minority investors, listed companies and the managers. In this paper, except for the contents in the first chapter, the remaining is divided into five chapters.Chapterâ…¡is the historical review for Business Performance Evaluation. This chapter first reviewed the historical evolution of operating performance evaluation of company in the west, divided it into cost control, accounting based, economic based, strategic business and stakeholders five periods. Then, in accordance with the changes in economic structure and state-owned enterprises reform, reviewed the historical evolution of operating performance evaluation of company in China, divided it into GDP cored, profit cored, economic benefit index cored, and maximum capital gain cored four stages. Then, analyzed the current situation of operating performance evaluation of listed companies, according to the type of financial indicators, divided it into financial evaluation mode, merit evaluation mode and comprehensive evaluation mode three types. Our purpose is to sum up conclusions with the regularity, so as to provide a useful reference for the construction of evaluation system of operating performance of latter listed company.Chapterâ…¢is the theoretical analysis operating performance evaluation of listed company. This chapter is mainly analyzing the foundation theory and assistant theory which affecting the evaluation system of operating performance of listed company, aiming to propose the theoretical foundation for the design frame in the construction the evaluation model of operating performance of listed company from the view of investors. The foundation theory is the economics and management theory which has a direct or indirect impact on the evaluation, but it does not specialized serve for the design of the evaluation of the performance of listed companies, but also as basis of the management theory of many other enterprises; assistant theory is the theory which has direct impact on the operating performance evaluation of listed company.Chapterâ…£is the construction of the evaluation model of operating performance of listed company. This section is the core of the thesis, which is the main innovation. This section took investor as evaluation subject, discussed the evaluation problem of operating performance of listed company, from the establishment of evaluation idea, definitude of the evaluation process, the building of evaluation system three aspects reconstructed the system of operating performance evaluation of listed company in China. This chapter first constructed the whole frame of the operating performance evaluation of listed company, and then explained its basic content.Chapterâ…¤is the test of the operating performance evaluation model of listed company. This part based on the scientific analyzing the management characteristics of banking industry, using the existing evaluation model of operating performance in banking industry at home and abroad, determined the characteristics evaluation indicators of the banking industry and the corresponding weights, transformed the model built up in Chapterâ…£of listed companies to suit in banking industry, according to the financial report of listed company in Banking industry and related data, tested scientific property and operability of the evaluation system set up in this paper.Chapterâ…¥is relevant policy recommendations. In this part, we pursuant to the evaluation conclusion and the result of the test of the model, proposed investment recommendations to minority investors, management suggestions to listed companies and the policy proposals to managers, introduce the theoretical research into practice mostly, so as to realize the application of this research.Innovation point of this paper is mainly reflected in the following aspects:(1) From the investor perspective to define the concept of operating performance of listed companies. This paper located the investor of listed company in minority investors shareholders and potential investors, which differs from majority shareholder of the distinction those investors at this stage of the actual needs of listed companies and majority shareholders, because we believe that the actual demand of investor about listed companies nowadays is different from majority shareholders virtually. Consider the actual demand and information channel, we think that performance achievement and management performance is different, it is the external manifestations of operations of listed companies, it shows the comprehensive capacities of listed company. In other words, the operating performance of listed companies is diverse, as financial capacity, marketing capabilities, innovative ability and the ability to grow are its basic elements.(2) Based on the perspective of investors of listed companies built the operating performance evaluation model. The model is three-dimensional dynamic coupling model, including evaluation concept, the evaluation process and evaluation system three dimensions.Evaluation concept is the basic principle of guiding the evaluation, is the premise of operation of evaluation model, including the contingency concept, value concept and system concept. The so-called contingency concept is that to design an operating performance evaluation systems of listed company need to take context of the organization into account.The so-called value concept, refers to a listed company operating performance evaluation system should take shareholder's value as its yardstick. Therefore, the establishment of listed companies operating performance evaluation system, whether it is the choice of evaluation index, or determine the method of evaluation both should based on the interests of investors to design, should be shareholder value-oriented, so that the evaluation model constructed can conform to the interest and the demand of investors, can promote maximize shareholder value.The so-called system concept is that in the design of listed companies operating performance evaluation system, it is necessary to pay attention to the integrity of system elements and t the interrelationship between the elements. The elements include evaluation goal, the evaluation indicators, evaluation method and evaluation criteria, and other basic elements. If the elements are incomplete, the lack of any one may affect the effectiveness and efficiency of implementation of performance evaluation system; if the elements are uncoordinated or even contradictory, it may limit the validity of performance evaluation system.Evaluation process is basic process of evaluation, which ensures the operation of the whole model in particular emphasis on application the accounting analysis in the listed company's operating performance evaluation. Minority investors in the process of evaluating should make use of the available of the relevant accounting knowledge, distinguish the information the listed company reported. Without this step, it may likely lead to "input is rubbish, output is rubbish", or even misleading decision-making, cause losses to investors.Evaluation system is operating tool used in listed companies operating performance evaluation, it is the core content, including evaluation indicators, evaluation criteria and evaluation method three basic elements.The dynamics of the model is mainly shown as follows: first, the design of evaluation index of need to consider the environmental variables of listed companies, in particular industry characteristics; second, the establishment of evaluation criteria need to consider the industry standard for many years, not static; third, the index weight in evaluation method should adjust flexibly according to environmental changes of listed company.The coupling of model is mainly refer to the internal logic between evaluation concepts, the evaluation process and evaluation system these three dimensions. Here, evaluation concepts define evaluation process and evaluation system, evaluation process affects the output of evaluation system, operation of evaluation system testifies the effectiveness of evaluation concept and evaluation processes.(3) Designed operating performance evaluation index system of listed companies based on the perspective of investors. This indicator system has three notable features: first, general character and special character combined. Entire system is divided into basic indicator and special indicator, the basic indicator reflects common features of all listed companies, special indicator reflects the heterogeneity of the different industries, which can be contingency, designed according to the industry of listed companies. Second, the financial and non-financial combined. Financial indicator is the primary indicator in the system, at the same time, giving proper consideration to the non-financial indicators, such as marketing, innovation. Third, value of company cored. We design evaluation indicators not only from the perspective of value creation, but also introduce Economic Value Added (EVA) as the core indicator.(4) Made several constructive suggestions for the profit-related people of listed company. In this paper, through the study, and we think that manager should change supervision idea, should take enhancing the value of the company, protecting the interests of investors as the orientation, should revise the existing listed companies IPO, additional cash and criterion of allotment of shares; management control system should be established within the manage level, which protect of the interests of investor, aim to the maximum value of company, apply value management; investors should establish value investment philosophy, master the accounting analysis method to know earning quality of listed company, pay close attention to the achievement of listed company.