Chinese performance measurement index of today can't measure shareholder value objectively so as not to realize the aim to maximize shareholder value because they are computed directly based on accounting profit. Accounting profit don't consider the cost of equity capital and mere are much difference between accounting principles and benefit of shareholder.A new performance measurement index named Economic Value Added (EVA) consider the opportunity cost of equity capital and rectifies the distortions of profit made by accounting principles.It's a good index to measure sharehold value added and manager performance because it incent manager to do their best to add shareholder value.EVA has been applied successfully in many foreign companies.But due to the difference of company culture between China and foreign countries ,EVA index can't be applied to Chinese companies directly .At present,the research on Chinese EVA index is still in beginning.My research want do some work on it.Firstly my thesis analyze the disadvantages of Chinsese performance measurement index of today.Secondly,it focuses on EVA index of Chinese performance measurement system,especially how to compute EVA for Chinese companies.EVA=NOPAT-Capital Employed X WACC and here NOPAT (Net Profit After Tax) is based on adjustment of Net Profit,Capital Employed is based on adjustment of Total Capital and WACC(Weighted Average Capital Cost)is based on 0 index.My thesis focus on adjustment items of Net Profit and Total Capital.Finally,my thesis compute EVA of four years for Tsingtao Brewery Group and Yanjing Beer Group through Excel software and analyze the two companies based on computing resultln this example,manager compensation scheme is based on the result. |