Research On How To Maximum Share Holder Value Through

Entering 1990's, America and the rest of G-7/western countries have gradually moved to the position that the main responsibility of management is the creation and preservation of shareholder value. Investors and managers need to leverage highly effective tools to communicate with each other. These tools help form the measurement methods needed to effectively manage shareholder value. Managers should also demonstrate the measuring management performance accurately. EVA has provided a good communication tool between shareholders and management, thus measuring a companies worth objectively and more importantly as accurately as possible.The purpose of this essay is to introduce an EVA managerial measurement system through comparative analysis of valuation indexes to prove EVA is the best tool to estimate shareholder value pointing out the compelling reasons to use EVA for a Chinese company. In the meantime, through the study of Xu Ji group Limited, Should demonstrate the real world impact the EVA system to shareholder value.The thesis is divided into six parts. Part one is a preface summarizing the origins of shareholder value and the basic principles of EVA. Additionally, part one outlines the current evolving status of EVA, and the advantages of using this system in measuring shareholder value.Part two covers in detail the underlying principles of EVA. EVA is essentially economic profit and develops from residual value, which adjusts the generally accepted accounting standards in order to get a closer imitation of economic profit.The third part is the most important part of the thesis. This part tells us how EVA is applied in the management of shareholder value. By comparing several tools of performance measurement, we can draw a conclusion that EVA is the best measurement system to maximize shareholder value.