| The issue that how to correctly judge whether an enterprise is good or not has drawn closeattention from both economics circle and business circle for a long time. From the19thcentury to now, the criteria for evaluating the company has evolved through four stages,which successively are: Cost Minimization, Profit Maximization, Economic EfficiencyMaximization and Shareholder Wealth Maximization. At present, the thoughts ofShareholder Wealth Maximization draws much attention from the people. And theeconomic value-added (EVA) assessment under the thoughts of Shareholder WealthMaximization has once become the hottest management tool in the business circle. SinceEVA is the economic profit which is equivalent to net operation profit after tax (NOPAT)minus capital cost, it is regarded as the real value created by the companies for theirshareholder. Along with the deepening practice in business, EVA has developed from amanagement tool to a comprehensive value management system. EVA covers variousfields in enterprise from strategy-setting to operation management, incentives&restrainsand business culture, helping enterprise constantly create value. In addition, against thecurrent backdrop of increasingly limited access to global resources, the corecompetitiveness of enterprise will be bound to be determined by its efficiency of allocatinglimited resources. Therefore, although the current EVA practice still has some problem tobe resolved, the business circle should attach greater importance to EVA and improve it asa globally well-recognized key index for evaluating enterprise competitiveness.State-owned Assets Supervision and Administration Commission of the State Council ofChina (SASAC) was established in2003, which ended the history that ChineseState-owned enterprises (SOEs) were supervised by too many governmental departments.SASAC started to supervise all the SOEs under the central government (central SOEs) astheir investor. From the perspective of investor, SASAC formulated the performanceassessment system of central SOEs, and strictly implemented the incentives&restrainsmechanism which was closely linked with performance. Thanks to the performanceassessment system, the economic responsibility was ascertained tier by tier to thegrass-root among central SOEs, the economic performance of central SOEs was improveddramatically, and the value of State-owned assets was appreciated greatly. In2010, in orderto resolve the problems of high debt ratio, excessive investment impetus, weak ability ofcreating real value, etc., among central SOEs, SASAC introduced the EVA indicators to theperformance assessment, spreading the idea of capital cost. The EVA assessmenteffectively contained central SOE investment impetus, guided central SOEs to optimizetheir capital structure, improve their efficiency of using capital, voluntarily safeguardinvestor’s interest, and to create real value for all the Chinese people who are regarded asthe shareholder of SOEs. In2013, the Resolution of the Third Plenum of18th CPC CentralCommittee discribes SOEs as an important force safeguarding the common interests of theChinese people, which shows that SASAC has created a new effective way to developSOEs.The author of this article systematically studies the EVA theory, carries out field study onthe EVA management practice of the enterprises both in domestic and abroad, and analyseshow to improve value management in enterprises through EVA assessment. The author alsomakes an in-depth analysis on the central SOE performance assessment measurespromulgated by SASAC as well as the intention of the policy-makers, sorts out the currentperformance assessment system of central SOEs, and raised up suggestions for furtherimproving the EVA assessment on central SOEs. |
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