The Establishment Research On Financial Index System Based On The Concept Of EVA

With development of socialist market economy system in our country, enterprises face increasingly fierce market competition. Meanwhile accompanied by the gradual improvement of capital markets, business investment and financing activities are diverse which lead to uncertainty and risk increasingly. Investors, creditors and other stakeholders have to pay more attention to financial analysis of accounting information disclosure and accurate and timely the operating and financial situation. Financial evaluation indexes play a very key role to the ability to pay or to earn and some information of business processes (business performance conditions). Therefore, it is significant that is establishment and improvement of the financial indicators system of enterprise.EVA has become a widely used and new type of financial evaluation indicators in western countries since the 1980s. It overcomes the shortcomings of traditional accounting profit targets, which is a more accurate measure of the enterprises in the period of time to create value for shareholders. The simple definition of EVA is profits which is net after-tax adjusted operating profit minus the total capital cost. Compared with traditional accounting profit targets, EVA considered the opportunity cost of owner's equity, and the calculation of the actual situation to make proper adjustment, according to company accounting information. To some extent, it eliminates distortion and misrepresentation reflected by the real performance of the enterprises.Although the EVA has certain advantages compared with the traditional indicators in measure of corporate performance, they can not replace each other. They should be used together. Because of it, this paper focuses on financial indicators system which takes accounting profit as the core added of EVA and cash flow information.This financial indicators system based on EVA which has some advantages:(1) EVA has some'advantages on measuring creation value capacity of the enterprises; (2) traditional financial indicators can reflect business ability to pay, to operate and to grow; (3) Cash flow indicator can reflect the earnings quality, financial flexibility advantages. This paper has established a set of the new system of financial indicators with cash flow of information which added EVA as the core and be based on accounting earnings to enrich and improve the existing system of financial indicators.