Application Of EVA In Huaxing Chuangye Communication Technology Co., Ltd. Operating Performance Evaluation

The GEM market from the establishment of 2009 in China, expanding the scale, but compared with the company of main market, most companies of GEM market are small high-tech enterprises. They have a “high input, high-yield, high risk, high-growth” common characteristics. So it attracted widespread attention of the whole society. While due to the separation of ownership and management rights, led to a conflict of interest between managers and shareholders. The contradiction needs a performance evaluation means to coordinate. But these companies have not yet formed an effective business performance evaluation tool.The operating performance evaluation is an important part of business management, good operating performance evaluation can help companies summarize past experience, to lead the future development better. The traditional operating performance evaluation only focus on past problems, rather than the developing of enterprises. And without thinking about the cost of equity capital, there must be a certain bias.Through the survey, since Huxingchuangye listed in 2009, its share price has been declining. Then we must ask whether the enterprise actually creates value for shareholders, and how much value they have made. At present, Huxingchuangye is facing the challenges of complex market environment, it is essential to improve the level of business management. Especially for small and high-tech enterprises such as Huxingchuangye, they need more effective performance evaluation mean for providing the relevant business-related information.The paper solved the main problem which the lacking of Huxingchuangye Co.’s performance evaluation. The paper uses the case study method, firstly, describing the economic value added(Economic Value Added, EVA) concept, and reviewed the relevant research results of this method. In the specific case, it analyzes the problem of Huxingchuangye Co.’s performance evaluation methods in the traditional evaluation method. Applying comparative analysis study, introducing EVA evaluation method, by calculating EVA, comes to conclusion: EVA can be more truly reflecting the business situation; at the same time it can help enterprises to enhance their core competitiveness.