Study Of EVA's Application To The Listed Coal Companies' Performance Evaluation

It is well known that coal is a non-reproducible resource, which plays an important role to our economy. In the past few decades, as a pillar industry, the coal industry has an important contribution to our economic development. With the continual adjustment of the modern enterprise system in our country, more and more coal enterprises come into the market gradually. In the same time with the simultaneous separation of the owner and the operator in one company, the cost of the commissioned agency also increases. Therefore, how to evaluate the operational performance of a listed coal company has become a serious issue in the coal industry. According to 《some advices on how to impel the reform and open and the steady development of the capital market》 the promulgated by the State Department in early 2004, we also can speculate that the listed coal companies cry for a new evaluating systemwhich can better adapt to the new economy at present------a evaluation based on value------topierce through the shortcomings of the traditional accounting return. So we can appropriately evaluate the operational performance of the listed coal companies.As a new indicator to evaluate the operational performance of a company, Economic Value Added (EVA) includes the opportunity cost of the stock ownership capital. Then it can reflect the true wealth created for the stockholders by the listed companies more accurately. The application of EVA has become a hotspot in the business circles and the academia. By examining the actuality of the listed coal enterprises, the study points out the problems in them, analyzes the feasibility and the necessary of EVA's application and recommends it's calculation. The study then puts forward how to improve their EVAs of the listed coal companies to create more wealth for their stockholders. Based on comparison-analysis, standardization-analysis and case-analysis, the study calculates the EVA of the Yankuang Group and compares the result with the traditional return indicator. According to the analysis above, the study concludes that the evaluative system of EVA can reflect the operational performance of the listed coal companies more truly and more accurately. As an indicator of performance evaluation, this article fatherly points out EVA also brings a new idea for the operators and investors of those listed coal companies and offers the new approaches on how to create more value for coal companies.