The Application And Revision Of EVA Used In Chinese Stock Market

Economic Value Added (EVA) is one of measures to evaluate the operational performance of enterprises, which has been paid close attention since 1990s. Because EVA considers the equity capital cost of enterprises, dispels the accountant distortedly and reduces the chance to manipulate the surplus, it can reflect enterprise's performance more truly, thus it is widely used in the west. The domestic evaluation on enterprise's performance has based on accounting benefit all the time. Because it doesn't consider the equity capital cost and is easy to be handled artificially, accounting benefit can't weigh the operational performance of enterprises accurately, thus it receives numerous criticisms. The domestic scholars have carried on a large amount of research on EVA, but the research contents concentrate on introducing and analyzing, they demonstrate the Chinese listed companies. The study on revision of EVA while using in our country is still a blank. Therefore, it is important to study the application and revision of EVA according to the actual conditions of our country.Firstly the paper carries on simple retrospect and introduction to the concept, computing method and application of EVA at home and abroad. Then it analyses the validity and limitation in China's securities market, puts forward the necessity revised. On this basis, it analyses the content that EVA measures revises from accounting adjustment and cost calculation of capital. It summarizes calculation formula of domestic listed company after defining the content that EVA revises. Finally it researches comparatively on EVA measure after revising, traditional benefit measure and EVA measure not revised in light of the financial data of 100 listed companies, all of this can prove that EVA measure after revising is more valid in weighing the operational performance of listed company.The main conclusions of this paper:1,EVA measure must be revised in the domestic security market, while it is regarded as the investment analysis tool to weigh the operational performance of enterprises better.2,When EVA is used to evaluate the business performance of listed company as the outside measure, the accounting adjusted items concentrate on five items, such as business reputation,construction in process,deferred tax,reserve fund,non operating revenue and expenditure etc. It is not necessary to carry on the extensive accountant adjustment.3,The suitable model to calculate the equity capital cost is capital asset pricing model (CAPM model) in accordance with availability and reliability of date.4,EVA measure after revising is more valid in weighing the operational performance of listed company.