The Enterprise Valuation Of Software Services Industry Based On EVA

In the current economic environment, competition is becoming increasingly harsh, companies rely on their own "closed door" type of development, the living space will be squeezed smaller and smaller by the same industry enterprises. Companies through equity trading and other ways to achieve their growth and enhance their scale. Making equity trading, investors need to focus on the value of the target company’s attention, and how to properly calculate true value of the business that this issue has been repeatedly discussed and studied in theory and practical application.In recent years as the software industry is non-polluting, high value-added economic importance to the intensity of high-tech industries, the country pay more and more attention to it year after year, and its development trend has also maintained an upward trend. The software industry relative to other industries is unique. First because the software industry needs a long time to grow, in the beginning of the establishment of software companies, it needs more capital than other industries. Second, Software services industry products need a long time research, the research and development process is more complicated. Finally, the risk of the product is high, the initial investment in a lot of time, manpower and capital, but in the end probably because of developed products have been eliminated, leading to the initial investment capital without a corresponding recovery of funds.Former scholars also research the valuation model EVA-based applications in the enterprise software research, but they ignored the research and development costs as well as the adjustment of market development in the choice of EVA adjustment programs, without considering the special nature of the software services industry. In this paper, it improve EVA valuation model for software services industry as considering the above two adjustments.The first part of this paper is an introduction, mainly introduce the research background, research significance, as well as the current research. The second part is the basic theory and EVA adjustments on EVA. The third part introduces the cost approach, market approach, the concept of discounted cash flow method and the limitations of these three methods in the software services industry applications. The fourth part is a combination of software and services in the characteristics of the industry, the improved EVA valuation model. The fifth part is the EVA valuation applied to the Chinese software, to verify the feasibility of the model. Based on a comparison of EVA and net profit, as well as analysis of the traditional financial indicators, proposed ways to improve the value of China software. The sixth part is the conclusion and prospect.