Research On The Value Validity Of Listed Companies Based On EVA

The reason why enterprise exists is to pursuit enterprisevalue (EV)maximization.It’s necessary for enterprise to observe the change of EV and create new value. Only bythis way can enterprise be promoted all the time. The traditional methods measuringvalue just add up all the account value of enterprise’s assets. The results of this kind ofmethods are not accurate and could make negative influence to decision of enterprise. Infact the factors which can’t be reflected in financial statement could also make revenuefor enterprise. The factors could increase EV and create wealth for shareholders like realassets. EVA solves the problem which puzzles people for quite a long time. The methodmeasuring value based on EVA pays attention to find the potential of enterprise andcreates value.EVA comes to China for quite a short time and many people suspect theeffectiveness of EVA. The paper finds the effectiveness of EVA on measuring EV byusing the method of both empirical study and normative study. To emphasize theimportance of EVA the paper makes contrast between EVA and traditional financialindex. At the same time the paper makes people to have a further cognition on EVA.