The Empirical Research On The Correlation Between EVA And The Stock Price Of Agricultural Listed Company

Economic Value Added which is created by American Stern Stewart managementconsulting company has been considerate as a new type of achievement effectevaluation system and value analysis tool science the end of last century. Itis based on the idea of residual income，and is the representative of theshareholders’ profit. The core meaning of EVA theory is: only when the capitalgains are much more than the cost that the listed company invested, theenterprises can create value for shareholders in the true sense. As the coreof economic profit index system, EVA is put forward based on the traditionalaccounting profit index system, and is better than the accounting profit indexsystem. The fundamental difference between them lies in the “cost of capital”measurement. The traditional accounting profit index only considered the debtcapital costs, while EVA is comprehensively contained all costs of the company,they are debt capital and equity capital, so EVA can truly reflect the operatingperformance of listed companies. In this article, it shows the superiority ofEVA index evaluation method, which is Based on the analysis of the domestic andforeign theory, and describes the correlation between the indexes of EVA andstock price of agricultural listed companies particularly. In the demonstrationanalysis, the author collected21agricultural listed companies’ financial datafrom2006to2010, and calculated EVA according to the principle of accountingsubject adjustment, then introduced EVA per share as a new variable to measurethe correlation of EVA per share with stock price. The conclusion presents thatthe two indexes and stock price has a certain degree of relevance, but EVA pershare is more significant. That means the model is effective. At present, oursecurities market is still not mature, to apply the EVA theory in China’s securities market investment is still facing some unfavorable influence andrestriction. But from this analysis, applying the EVA theory in China’ssecurities market in investment analysis and valuation of listed companies isgood for standardizing the behavior of listed companies and promoting the stabledevelopment of stock market. With the increasing of domestic financial marketand the development of the EVA principle，EVA evaluation method will show itsadvantage, and will be widely used by the listed company and ordinary investorsin the future.