Research On Financial Performance Evaluation Of Tongrentang Based On EVA

As a basic strategic pillar industry related to national economy and people’s livelihood,pharmaceutical industry is an important part of China’s national economy.Pharmaceutical industry has initially formed a relatively complete pharmaceutical industry system and drug distribution network,and China has developed into a major pharmaceutical industry country.With the continuous advancement of medical reform and the continuous development of pharmaceutical enterprises,how to objectively evaluate the business performance of pharmaceutical enterprises is a major problem facing pharmaceutical enterprises,and also the focus of attention of investors and other stakeholders.At present,in order to ensure its competitive advantage,pharmaceutical listed companies will evaluate their financial performance,analyze their business status and management effect.As an index different from the traditional financial performance evaluation,EVA can clearly reflect the operating profit of enterprises by incorporating equity capital into the calculation,which is helpful for the comprehensive evaluation of the business activities of enterprises,promoting the healthy development of enterprises and enhancing the market competitiveness.This paper starts with the actual situation of Tongrentang Company,mainly using case analysis method,comparative analysis method and literature method.Based on the data of financial statements from 2013 to 2017,this paper analyses the current situation of Tongrentang’s financial performance evaluation system,finds out the problems existing in the application of traditional system,puts forward the necessity of introducing EVA,and further carries out practical application to prove the validity and rationality of EVA’s financial performance evaluation.Applying EVA to Tongrentang’s financial performance evaluation system,calculating according to the expression of EVA,comparing and analyzing the differences between EVA indexand traditional index,finding out the actual operation problems of Tongrentang,and verifying the advantages of EVA in financial performance evaluation.This paper puts forward some suggestions to improve Tongrentang’s financial performance.Through the research,it is found that EVA financial performance evaluation can be effectively applied in enterprises,and the indicators have more advantages.It can not only quickly find the weak links and changes in value of enterprises,but also is not easy to be whitewashed,and can truly reflect the profits of enterprises.It plays an allround role in the operation of enterprises,takes the lead in finding crises,preventing risks and promoting enterprise management.It can meet the expectations of shareholders,better handle the relationship between principal and agent,reduce unnecessary losses,optimize bilateral interests,and promote win-win development of enterprises.