Research On Performance Evaluation Based On EVA

At 2010,SASAC(State-owned Assets Supervision and Administration)began to put the performance evaluation system of EVA into effect in central enterprises.The purpose is to improve the management level of the enterprise through using this indicator.The development of reality proves that the indicator can make a more scientific evaluation of the business performance of the enterprise,so the central enterprises have applied it in succession.But now,the situation and effect of implementation in State-owned enterprise are uncertain.Consequently,this article will research the EVA performance evaluation system in a State-owned enterprise named ABC and analyze the implementation situation and performance evaluation effect of EVA in this enterprise.On this basis,we will put forward suggestions for improvement according to the specific development situation of ABC company.After collating related information and understanding the related theory of EVA performance evaluation,this paper analyzes the current performance evaluation status of ABC company.By consulting the annual earnings or loss forecast report in recent years of the case company,we find that the current performance evaluation indicator of ABC company are still the traditional indicators,such as net profit and earnings per share,so we first evaluate and analyze the operating performance of ABC company by net profit and Du Pont analysis.Then,we begin the research of the main part of the article.We evaluate the business performance of the ABC company based on EVA.Then,the evaluation results of two different evaluation indicators are compared in three aspects: economic value added(EVA)and net profit,the vertical comparison of net asset EVA rate and net asset yield,driving factors of economic value added(EVA)and driving factors of Du Pont analysis system.From the research,we found the potential problems existing in the current performance evaluation system of the case enterprise and the advantages of the economic value added EVA.Finally,according to the problems found in the research process and the develop features of ABC company,we put forward some suggestions on the application of EVA.For example,the managers can consider the opportunity cost of coal resources,reduce the ratio of liabilities and rationalize capital structure,improve the audit and accountability system to ensure the true and reliable financial data,strengthen the training and popularization of EVA and mobilize the enthusiasm of business operators,managers and grassroots employees,attach importance to non-financial information such as social responsibility,focus on optimizing internal business process,etc.