Study On The Application Of EVA In The Performance Evaluation Of The Telecom Operators

In recent years, due to the development of domestic economy and competitive mechanism incommunications industry, the competitive pressures of full service operation forced the telecomoperators must regard enterprise value maximize as the core pursuit so as to promote enterpriseperformance. The accuracy of the performance evaluation results has a direct impact on theimprovement of the internal management and the achievement of expected goals, and became moreand more important to the survival and development of enterprise. The traditional performanceevaluation index has shown its limitation in measuring creative value accurately, but EVA(economic value added) obviously does better in this field. What’s more, the State-owned AssetsSupervision and Administration Commission push the full implementation of the EVA performanceevaluation in telecom operators, so as to balance the performance growth and risk control, andpreserve or increase and prevent the loss of state assets.Therefore, the paper describes the research and application of EVA at home and abroad at first;secondly, analyses the status quo in telecom operators and the problem traditional performanceevaluation index system; thirdly, expounds the theory and computational methods of the EVA,indicating that the most important feature of the EVA is the consideration of the cost of equitycapital, which look at the long-term development and truly reflect the enterprise value; fourthly,prove the superiority of EVA through the empirical analysis comparing the traditional performanceevaluation index with China Unicom as a case and analysis the operation management issues andpropose practical suggestions for improvement based on an in-depth EVA performance evaluation;finally, present some attentions during the implementation of EVA index.EVA has incomparable advantages in performance evaluation measurement comparing with thetraditional one in telecom operators, which reflects current management situation well and truly.EVA is a practical performance evaluation measurement which helps accelerate internaladministrative improvement and enhance corporate value and core competitiveness under the neweconomic situation.