EVA As A Performance Evaluation System On Listed Companies

After China joined WTO, there no customs barrier anymore, our domestic enterprises especially listed companies have to meet both abroad and native competition. In order to make good winning in the new posture, they have to optimize their resource scheme flow, and to improve their management tools to ascertain, evaluate and tradeoff various strategic decision-making. EVA system provides a new method for a enterprise not only to win the new challenge but also to resolve the need of resource scheme and fortune increasing.For a long time the major corporate financial theory has believed the aim of business operation is to maximize enterprise value and managers' primary job is to create wealth for the shareholders. With the fast changing capital market, the traditional evaluation methods based on accounting profit don't meet the demand. Actually accounting profit includes the real economic profit and the cost of equity capital which should be subtracted in order to evaluate the managers' performance. This leaves much room for managers to adjust the accounting profit and their immoral behavior become unavoidable. So Economic Value Added arises at the historic moment.This thesis is divided into four parts besides the preface. Firstly, in chapter one, the author divides the whole evolving process of financial performance measurement into four phases: cost-oriented performance measurement period, profit-oriented performance measurement period, comprehensive-investment-effectiveness-oriented performance measurement period and value-oriented performance measurement period.In the second part we give the introduction to the economic added value theory. This chapter mainly includes the concept of EVA and the original background , the theory frame of EVA. And the economics foundation of EVA and accounting foundation are analyzed, the index computing technology of EVA, the comparisonof EVA and traditional achievement evaluation index, including the comparison of EVA and NI , EVAandNPV , EVAandROI , EVA and EPS.The third part is the application of EVA. I introduce the general application in present economy of EVA at first, then recommend that EVA is used in business administration , help create value for shareholder separately , to the function and using value in purchasing in the company etc. of the capital market.The fourth part has probed into the application of EVA in the achievement of listed company of our country. Firstly I discuss EVA plays an important role in improving the performance evaluation of listed companies. Then we discuss the effect of EVA. At last we take the example of electronics industry listed companies as the empirical Analysis object.