Comparative Study On Economic Value Added (EVA) And Traditional Financial Measurement Of Performance Evaluation

Operating Performance is one of the most important factors for the existence and development of the listed companies. Making scientific, objective and right evaluation of operating performance of the listed companies is helpful to improve and increase their allocation efficiency of capitals. At present, traditional evaluation indexes exist some flaws Focusing on those problems, this paper will study a new performance evaluation indicators called EVA (Economic Value Added, Hereafter refers to as EVA) in order to evaluate their performance more accurately andimprove their operating performance.Based on the theory of EVA, this paper divides into five parts altogether. The first part is mainly introduced the presentation of questions and the research background. In the second part, the concept and history of enterprises performance evaluation and EVA are described from the perspective of both domestic and foreign. The third part mainly introduces calculation principle and accounting adjustment of EVA. In part four , this paper attempts to select the financial data revealed of 31 steel trade listed companies in China from 2002 to 20056 year as samples, and then study on EVA and traditional financial measurement of performance evaluation by adopting statistical method. In this part, the analysis focuses on three aspects: (1) General analysis, also known as descriptive statistical analysis. (2) Correlation analysis of EVA and traditional financial measurement of performance evaluation. (3) Regression analysis of EVA, traditional financial measurement of performance evaluation and MVA. The result indicates that EVA is superior to traditional financial measurement of performance evaluation in measuring listed companies' value. Using EVA to measure the performance evaluation of listed companies is proved to be feasible. It also provides some proofs for carrying out the EVA Performance Measurement System in the listed companies. In the last part, a brief summarization is drawn. Based on the specific conditions of the domestic security market, this paper also puts forward some suggestions. Although EVA has some superiority comparing with traditional financial measurement in measuring listed companies* value, they can't substitute each other. They should be combined to use. Due to the imperfections of security market, it is difficult to implement and apply EVA as a performance evaluation index. How to use EVA in the companies still needs further study.The innovation in this paper is taking the steel trade listed companies in China as study object, no more Involving several fields, so as to avoid the influence of companies' value because of the difference of competition degree in the other fields. In addition, based on the absorption, abstraction and assimilation of domestic and foreign research concerning evaluating corporate achievement, this paper tries to analyze the specific application of EVA used in the steel trade listed companies by adopting positive analysis method, in order to contribute to our current theories which are applied in our companies, especially in the listed companies.