The Research On The Financial Analysis Index System Of The Enterprise Value Based On Economic Value Added

In the end of 2009, State-owned Assets Supervision and AdministrationCommission (SASAC) issued order 22, which requests the full implementation ofeconomic value added (EVA) evaluation system by state-owned enterprises, whichwill replace net profit margin index to account for 40% of evaluation. Order 22 alsodrafts basic principles and detailed evaluation rules of EVA. This means EVA will beimplemented in all aspects including policy making process, system establishingprocess and even culture establishing process, which will help enterprises to enhanceawareness of value based management , improve financial analysis system and betterthe value creation.The research object of this thesis is the financial analysis indicators of theenterprise value based on EVA. We use the financial analysis theory, the corporatevalue theory, the EVA theory and the archival study method, from theory analysis toempirical research, according to the logical thinking of the connotation of thefinancial analysis of the enterprise value based on EVA, the influencing factors of thefinancial analysis of the enterprise value based on EVA, the construction of thefinancial analysis indicators of the enterprise value based on EVA and the empiricalresearch of the financial analysis of the enterprise value based on EVA to spread outresearch.At first, the paper defines the financial analysis of the enterprise value based onEVA which refers to an economic analysis activities that uses EVA as basic principlesand financial analytical techniques as basic methods to analyze enterprise’s operatingactivities, investing activities and financing activities and thus evaluate it profitability,operation capacity, solvency as well as value creation ability based on financialreports and other relevant information, which will largely help stakeholders to knowenterprise’s financial status and business operations and thus make the right decision.The paper also analyzes the impact of the external and internal factors on theenterprise value of the financial analysis index system based on EVA; and buildsframe for EVA oriented enterprise value financial analysis. Based on the abovementioned theories, the paper uses the electricity power industry as a sample to do theempirical test of the relationship between EVA index, traditional accounting index andenterprise value and discovers that there is a strong co-relation between EVA indexand enterprise value ; traditional accounting index is still of indispensable importance. Both MVA and EVA are effective index to reflect the enterprise value.