The Traditional Du Pont Financial System Based On EVA New Building And Empirical Research

EVA economic value added. Its theory is the result of Nobel economist. Merton millerand franco. Modigliani 《economic models about the value of the company》.From the mostbasic sense, economic value added is the company’s performance metrics, begin from theexisting EVA theory, combined with the traditional du pont analysis system to build a rate ofrights and interests of EVA as the core system of financial analysis. On the one hand, canbreak the traditional du pont analysis system with rights net profit as the core, the limitation ofthe new financial system based on EVA and proves the validity of this system；On the otherhand, EVA and enterprise value maximization has the natural relation, improve the EVA andimplementation of enterprise value maximization goals. Through the theoretical analysis andempirical research, therefore, to build a can really reflect the shareholders invested capitalvalue creation ability, effective analysis enterprise financial position and operating results ofthe financial comprehensive evaluation system. But also for business activities, financialmanagement provide strong support。Traditional du pont analysis system in the face of neweconomic era has some shortcomings, EVA arises at the historic moment, and EVA can bethrough net adjustment again, so you can replace the traditional du pont analysis system netprofit in the index with EVA, construct the new system. Replace the traditional du pontanalysis system net profit in the index with EVA on the analysis of the financial position andoperating results more logical. Implement the input and return match can effectively reflectthe return on investment. In the new system, the rate of total capital EVA on logic, totalcapital is the total capital adjustments, remove the operating liabilities, this match and EVA,properly reflect the relationship between investment and return。The cost of capital will not have a leverage effect, more can reflect the financial situationfor the enterprise financing decision provides the basis. Financial system based on EVA,contribute to the construction of financial incentive system. EVA value concept orientedfinancial system, applied to the management, the operator will stand in the perspective ofshareholders thinking and operation and management, so that the operator is consistent withthe goal of becoming the fundamental, effectively ease the contradiction betweenshareholders and managers, reduce agency cost.EVA is an absolute value, can be applied toeach business unit, used to measure whether a business unit to increase shareholder value. In a business unit performance evaluation, the traditional financial system of profit or return oninvestment, because not all costs are taken into account, even growing profits could erodeshareholder value.EVA financial system can not only from the strategic analysis the drivingfactors that affect enterprise value creation, and can be resolved through layer upon layer,deep into the enterprise management of each level on tactics, the asset management for theenterprise, the choice of the financing, capital structure decisions, such as the provision ofeffective help, ultimately achieve the goal of maximising shareholder value. After theoreticalanalysis, finally through the empirical study demonstrates the effectiveness of the du pontanalysis system based on EVA. This paper is the application of projection pursuit modelcombining immune genetic algorithm to demonstrate the effectiveness of EVA financialsystem.