Study On The Construction Of S Hi-tech Enterprise Performance Evaluation System Based On EVA

The theory origin of EVA is the idea of economic profit in the western economics, which thinks that all capital cost should be deducted. In the traditional financial performance evaluation methods, cost of owner’s equity is not considered of. As a result, cost of owner’s equity becomes a free lunch of corporate management. As long as the enterprise’s profit is greater than zero, it can be thought that managers increase shareholders’ wealth. EVA puts forward that owners of enterprises can be free to put capital into other areas to get return which can be explained by the concept of opportunity cost. According to the principle of matching the benefits and risks, the requirement of owner’s equity is higher than that of creditors, so only when the operators create more profit than the opportunity cost of investors, we can say that they increase the wealth of shareholdersTianjin S co. LTD. is a state-owned high-tech enterprise. Compared with the traditional enterprise, it has the feature of higher-invest, higher-risk, higher-yield and higher-intelligence, thus the traditional financial evaluation method may find it difficult to accurately reflect the characteristics of the enterprise. Combined with its feature of higher-invest, higher-risk, higher-yield and higher-intelligence, taking example by the existing performance evaluation methods, this article analyses the current performance evaluation system of S enterprise and establish a set of performance evaluation system applicable to it.First, this article introduces the meaning of EVA, the adjustment principle, the adjustment goal and emphasize that its main difference with the traditional performance evaluation system is the consideration of the cost of equity capital. Then, according to S enterprise’s production and management characteristics, discuss the applicability of EVA to the company, including the necessity and advantages. In part three, introduce the existing performance evaluation system of S company and analyzes its shortcomings. In part four, establish the EVA-based performance evaluation system. The main content includes:evaluation index system, evaluation criteria, evaluation method, evaluation report and the application of evaluation results. Among them, the evaluation index is the core of the performance evaluation system and EVA index is the core of the index system. EVA adjustment projects include the net operating profit after tax, capital invested, the weighted average cost of capital. Other financial metrics include profitability index, operation ability index, debt paying ability index and innovation and development capacity index. Non-financial indicators include market share, science and technology personnel proportion, quantity of invention patents, level of employees’ knowledge structure.Set evaluation standard for financial index and comprehensively analyze and judge non-financial index. In part five, the article puts forward some helps for advice according to any possible problem in the implementation of the system. Finally in the conclusion part, the article summarizes the main argument and the achievements.