An Chinese Empirical Analysis Of Economic Value Added

This paper attempts to investigate the usage of the 'EVA' in China. Firstly this paper makes adjustment of account to EVA , compute the capital cost and get the value of EVA. Secondly it studies relativity between EVA and traditional accountancy index and contrast them. The goal is to find whether EVA is better than traditional accountancy indexes to explain the value of listed company. Thirdly this paper makes explorative investigation on analysis of factor and the diverse line returns to get the model which can explain the value of the listed company logically.The research show: (1) There is obvious relativity among EVA,RON,EPS,ROE and CFV.(2) EVA has one advantage that can explain the MVA of the single year but other traditinal accountancy indexes don't have. (3) MVA is influenced by three factors mainly. The first factor mainly reflects the influence of the company's traditional income index. The second factor basically controls the change of EVA and reflects the economic value of the company. The third factor mainly reflects the cash flow of the company. (4) By making a new explaining model, the absolute and relative explaination ability of EVA rises obviously. Although from above-mentioned analysis we can find that EVA can explain MVA better than other traditional accountancy indexes, EVA is not enough to explain the change of MVA. So we may use EMA to explain the value of listed company with other traditional accoutancy indexesThe paper includes five parts. After the preface, we review documents related to the way of the EVA. Then in the second part we introduce the EVA, MVA and traditional accountancy index, the definition of WACC, research procedure and the methods of the research. In the third part, main body of the paper, we carry the empirical research on the sample selected employing the method of 'Pearson Relative Analysis', factor analysis and regression. The last part is conclusion and restriction.