The Research On Enterprise's Value Management Based On EVA

Based on the value of the management has become a new kind of western business enterprise management mode, as well as its effectiveness has been successfully applied by many international-companies. In 1982,EVA performance evaluation systemwhich be proposed by American Stern Stewart & Co. consulting company can measure the business performance and reflect the value of all aspects of the management. It also is the key to create wealth for shareholders.Enterprise's value management based on EVA, has a history of nearly 30 years and the theoretical research and practical experience has been relatively completed overseas. However, the studies about EVA in China began from the last century. Until now it has not been recognized as a mature theoretical system.This article aims to provide practical guidances for domestic enterprises by useing the western theories and practical experience of EVA. Managers can understand and solve problems in view of the owners in order to improve the management scientifically and achieve the objectives of enterprises preferably.From the valuation,performance measurement and incentive mechanism,the article explores three aspects including the content and method of EVA, the application of EVA as some references for enterprises in China. The article is divided into four parts. The first part introduces the background and significance of the research on EVA and then reviewes the value of management and EVA research at home and abroad. The second part is the value management and EVA management system. Firstly it introduces the value management system and the implementation situation of EVA.Secondly,according to the current financial management system,it proposes some deficiencies of the EVA management system.And then it analyses the theoretical basis,assumptions and calculation method especially 4M system of EVA.The third part is the analysis of application about EVA in enterprise value management such as the assessment of enterprise value, the evaluation of enterprise performance and incentive mechanism of application.It should be pointed out that valuation is the basis of performance evaluation, and performance evaluation and incentive mechanism are the innovations of the EVA value management model. Also they are the most widely used in domestic enterprises currently. The fourth part are the situation of implementation of EVA and case analysis. Combining with the enterprise internal classic cases of EVA including success and failure,it finds out the problems in the implementation process and puts forward some countermeasures and suggestions by summarizing the experiences and lessons.The final design for our enterprise management mode for EVA application. This is the innovation of this paper.At last,it concludes the deficiencies of the article.