The Research On Enterprise's Value Management Based On EVA

By the end of 1980s, managers learned a lesson from the fast changing capital market and the trend of globalization that capital has high mobility-----if you couldn't bring the required reward to shareholders' capital they would flow to where they could make it. Enterprises must pay for the capital that is employed. And the shareholders realize that opportunity cost. A real evaluation of managers' performance must take allthe cost into account.However, the traditional accunting profit and resulting measurement cannot truly indicate shareholder's value creation, partly because they neglect the cost of equity and can lead to value distortion subject to accounting principles. Economic Value Added arises in 1990s, which is proposed by Stern Stewart. EVA is a kind of measurement system created on the basis of value. It trully reflects the value that enterprise creates and leads the business goal of enterprise from sale to value. Because of this, the management system of EVA can combine the appraisal index mixed confusingly for the unified standard:Namely whether the business activities create the greatest value for shareholder.This paper proves that EVA is a kind of advanced management system theoretically on the basis of traditional value management and it also superior to traditional value management. The method to get the results is by comparing with traditional value index and by deriving of the formula.And then pass to EVA, enterprise's value, value-added (MVA) theoretical research of the relation of market, it is totally identical to obtain the goal of EVA system and thought of value management.In real case part, The paper has chosen the Stern Stewart in China Company promulgated 2001,2002 EVA datum and corresponding MVA datum. First researched to the relevance of EVA and MVA.Draw the conclusion that EVA having stronger relevance to MVA.And then,researched to the relevance of EVA and traditional index.We can consider that it obvious conclusion of result sto listed company,join EVA index for achievement appraise system than traditional achievement appraise system.In a word, EVA is that a new kind of manages idea which accords with value management. Have offered a new mode of thinking to enterprises. We think EVA management system has made important contribution in value management to...