Application Of EVA To Evaluation Of Listed Company

How to evaluate the real value of listed company is the important thesis in securities market and also is the best concerned problem of investor. Some profit indexes like income of each section, net asset yield and net profit have acted as the scaled standard of listed company for a long time. Because profit indexes can be reflected in financial forms and have the characteristics of simple and clear, most investors also make it as the scaled standard of listed company now. But along with the development of financial theory, the final goal of listed company is to make the value of stockholder most has been accepted at large. So value scaled indexes must reflect the value that is created to which is created to stockholders well and truly. The value to stockholders that is created by the company each year equal to the earning takes out the cost. But traditional indexes have not taken out cost of capital stock. It is impossible to evaluate the value that is created by the company to stockholders well and truly according as traditional indexes. Economic Value Added (for short EVA) was procreated based on overcoming traditional indexes limitation. It reflects the value that is created by the company to stockholders in a period of time. It was applied widely abroad in the middle of 1990s and has become the important makeup of traditional indexes.The thesis made demonstration analyses to find traditional indexes or EVA indexes which has better validity on explaining internal value of listed company by using historical data in Chinese securities market The study indicated EVA indexes have better validity than traditional indexes on explaining internal value of listed company.The thesis established value-evaluated model based on EVA, studied strictly how to ensure each parameter, explained how to use value-evaluated model in each status, and made demonstration analyses of Chinese listed company.The thesis introduced theory and value-evaluated model of EVA at large for help the investor to evaluate the listed company's internal value.