Research On The Relevance Between The EVA And The Enterprise Value Based On Companies Listing On SME Board

The Small and Medium sized Enterprises (SME) was formally started on the Shenzhen Stock Exchange in2004. It has been more and more important in the National Economy after nearly eight years’development, having great significance to China’s capital market. Its operating performance and future development received extensive attention. Maximize the value of Enterprises is the final target of business, and the drawbacks of traditional accounting indicators are becoming highlight. People are more increasingly concerned about the issue of how to assess the Value of companies accurately. With the implementation of ’the interim measures for person control the central operating performance’, EVA has become the index of central enterprises performance officially while it is to be a hot topic again. Is this a good choice for SME? How is the relevance between EVA and the enterprise value in SME? Does it can explain the enterprise value stronger than traditional indexes? All of these need further research.This thesis will base the environment of SME, writing from an empirical point of view of EVA targets and indicators in the traditional interpretation of SME listing enterprises and finding out witch will be better on accounting enterprise value. Do the EVA targets reflect it more accurate and fair? Under the present stage of SME board Listing Corporation, The results of regression analysis that there is significant correlation between EVA index and enterprise value. The interpretation of EVA is superior to the traditional index; it can reflect the SME board listing Corporation’s enterprise value better. With the further regression analysis and principal component analysis results, SME enterprises can combine the EVA and traditional index, describing their value from the profit ability and capital scale cash flow ability.Basic dates in this thesis are obtained on the basis of New Accounting Standards and the characteristics of SME, so the result will be more accrual. This paper focus the perspective on the SME board, The result of this thesis provide a basis for the further application of EVA,which does enriching and supplementing the reaches of SME, and has certain value both on theory and practice. At the end of this paper, we try to construct a statistical excellent explanation on the financial indicators by combining both of the EVA and traditional index through the principal component analysis method.This thesis can be divided into four parts in researching the relevance between EVA and SME:First is the introduction part. In this part we introduce the background and significance of the research briefly, and summarize the related studies at home and abroad of relevance between EVA and the enterprise value, trying to find out the ideas and research methods. The positive role and deficiencies are pointed out at the same time. In the second part, some theory analysis and its application are introduced:Such as the concept of EVA and enterprise value, the mathematical relation between them. The traditional indicators’limitation on SME based on the principal-agent theory is discussed, same to the EVA index’s superiority based on the valuable management. The EVA of SME is calculated at the end of this part combining with the actual environment, witch providing basics for further research. The third part is the core of this chapter. Through the empirical analysis, we study the EVA indicator variables, the traditional accounting index variable and the enterprise value of the sample’s date form2008to2011. researching these relevance and enterprise ability. Base on the three parts above, the fourth part summarizes the results of the empirical analysis. Combining with the theoretical part, it point out some suggestions based on the actual situation.