The Study On Application Of EVA

Taking the shareholder wealth maximization as the goal of the enterprise financial management has become one viewpoint that the financial management theorists and practices accept generally.Since the enterprise slects the value increasing as a goal,how measures its added value that becomes the core point of all attention.Making scientific 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 if a new performance evaluation indicators called EVA(Economic Value Added,Here after refers to as EVA) evaluates their performance more accurately and improve their operating performance.The concept of EVA was firstly proposed by Stern & Stewart consulting company.Since 2001, its branches in China also mainly bases on the EVA target to take"China market company wealth creation and deconstruction ranking". EVA belongs to the expansion of the traditional financial index.Though the both have certain similarity, EVA is all things considered the opportunity cost of corporate capital and it can unit the investment decision, performance evaluation and bonus incentives together .In this paper, I adopt the ways combining normal analysis with empirical analysis.Firstly, this paper's research backgrounds, contents and structures, methods and processes will be stated. Then, the paper will introduce the development history of EVA and adjusting events under new old accountant criterion. Meanwhile, analyzing the relation of MVA and EVA for after.In part three, the paper will take a listed coal enterprise which is Xinjiang International Industry Co.,Ltd for example to detail the adjustment and WACC. Part four is the keynote. The paper attempts to select the financial data revealed of 15 coal industry listed companies in China from 2004 to 2008 5 year as samples,and then study on EVA and traditional financial measurement of performance evaluation by adopting statistical method that's general analysis, also known as deseriptive statistical analysis, correlation analysis and regression analysis.And then discuss if EVA is more effectively reflect company performance than traditional financial measurement.Finally, according to the results of empirical analysis, the paper can get that it is feasible to measure listed enterprise performance using EVA. And then raising some measures to improve the listed enterprise ability of value creation in hopes that improving the companies performance.