Analysis And Promoting Measure Research On Economic Value Added Of Power Generation Enterprise

It is difficult to reflect the true operating performance of a company when we use the accounting profit evaluating indicators, because there are some shortcomings of the accounting profit indicatior, not considering the opportunity cost of the resource which has its cost as well invested by shareholders. The Economic Value Added (EVA) means earnings coming out of the Net Operating Profit after Tax minus the cost of all capital (including the cost of equity as well as debt) invested in an enterprise, which essence is economic profit. EVA can properly reflet comprehensive management capabilities of a company, particularly in value management capacity. So EVA is much more popular than any other evaluating indicators in foreign companies. The State-owned Assets Supervision and Administration Commission (SASAC) has decided to carry out the EVA indicator among China central enterprises since 2010, guiding enterprises to pay more attention to value creation, in order to achieve the goal of maximizing corporate value.This paper reveals the general true value creation status of power generation enterprises through analysis of the EVA of Datang International Power Generation Co., Ltd. and comparative analysis of related enterprises of the recent three years. It also points out EVA value driving factors of power generation enterprises through further analysis of EVA key value driving factors, focusing on EVA itself, based on the theory and application of EVA, based on the enterprise performance. Aiming at these driving factors, we propose measures to promote EVA of power generation enterprises, combined with their production and other aspects of management activities.Obviously, there are limits of EVA itself, when taking use of it, enterprises shall draw lessons from former and successful experience brought by listed companies at home and abroad, and then build up the EVA management system of their own, considering the local and international environment, the industry factors, the development strategy and the social responsibility undertaken.