Research On Performance Evaluation And Performance Promotion Strategy Of LZ Steel Co.,Ltd.Based On EVA Perspective

The core goal of financial management is to maximization of Shareholder's wealth,also the maximization of enterprise's value.In order to ensure that the responsible persons of central enterprises better fulfill the duty of maintaining and increasing the value of state-owned assets,the SASAC decided to carry out the economic value added(EVA)Evaluation in the central enterprises in 2010,which symbolizes a big measure of management reform in the internal mechanism of the central enterprise.EVA(Economic Value Added)is the economic value added,it is the net value which is deducted from the net operating profit after tax by the capital cost included equity and debt capital,its core idea is the capital investment is also the cost for operating.Only if the EVA value is greater than zero can the business result create value for shareholders.From the practical results,under the current institutional background of China,since the implementation of the state-owned SASAC's local EVA performance evaluation system,the enterprise value has been significantly improved.This paper will use the case study approach,by applying the EVA calculation method that SASAC issued in 2013 of the?The provisional measures for central enterprises leaders?(hereinafter referred to as" SASAC "measures"),with LZ Steel Corp's financial statements from 2012 to 2016 to calculate its EVA.Then using the comparative analysis:on the one hand,The EVA and its derivative index will be compared to the traditional profit index;on the other hand,selecting three assets comparable companies,making comparison of both traditional profit index and the EVA derivative index.The result indicates that whether the self contrast result or the comparison of the comparable companies result,LZ Steel Corp shows a worse performance result based on EVA performance method than the comparison results of the traditional profit index.According to this,the performance promotion suggestion will base on three aspects:improving the net operating profit after tax?improving the capital efficiency?optimizing the capital structure of the company.The conclusion of this paper can help improving the performance of LZ Steel Corp?providing reference for the steel industry?enriching the SASAC "measures" applying theory?enriching the research on EVA theory.