Study On Business Performance Of The GEM Pharmaceutical Enterprises Based On EVA

Operating performance is the final result that the enterprises optimize the allocation ofinternal and external resources. It mainly reflects whether the business of the enterprise isgood or not. The operating performance evaluated by the economic value added (EVA) hasconsidered the opportunity cost of all capital costs. In essence, it is the economic profit.Generally speaking, the operating performance is more accurate and efficient. GEMpharmaceutical industry in China continuously leads the GEM. This article values the GEMpharmaceutical business performance based on the EVA theory and studies the relationshipbetween the profitability, innovation, capital structure, company size, corporate governancestructure and the enterprise business performance.This article chooses the GEM pharmaceutical30listed companies among the year2009-2012as the research objects, selects a total of120observations and makes uses of theEVIEWS statistical analysis software to undertake the empirical analysis. In considering allthe opportunity cost of capital, the article uses the EVA theory to calculate the EVA ofenterprises. On the basis of the business performance named the EVA, this article has brokendown the Influencing factors into11indicators that are sales margin, return on assets, R&D,technical personnel, asset-liability ratio, board size, the proportion of the largest shareholder,the total proportion of the top five shareholders. According to the data collected, it isundertaking the regression analysis of the12variables to study the relationship between thefive major influencing factors. The study has found that the corporate profitability, innovation,asset-liability ratio, company size and board size are positively correlated with the businessperformance. In which the invention patents is stronger than the other two indicators in theexplanatory power of business performance. Ownership concentration degree is negativelycorrelated with the business performance. It is necessary to concern about the excessiveconcentration of equity in the GEM pharmaceutical industry.