The Performance Diagnosis And Management Proposal For Improvement Of China Unicom Based On EVA

Along with the monopoly pattern's breaking and the reorganization pattern's establishment of communications industry, facing the capital market and investors'highly attention to the value management and creation abilities of the company, which requests China Unicom objectively to take the maximization of enterprise value as the core pursue. While mining and amending its own management deficiencies continuously, China Unicom needs to promote its performance furtherly. Performance diagnose appears even more important as the value management's most important link.Its result is accurate or not will influence on the promotion of value creation capacity . To China Unicom, how to find a kind of index to correspond the profession characteristic and reflect accurately the enterprise performance is a important problem to ponder and solute urgently.As a new performance diagnose index, EVA makes the revision on enterprise operation deviation and distortion ,with the full consideration of capital cost and structure. EVA has made up traditional diagnose indexs some flaws effectively and makes the result of enterprise performance diagnose more accurate. This article took the EVA performance diagnose as the master line,used the synthesis utilization comparative analysis method and affirmed EVA fully the performance diagnose method in China Unicom's is suitable and feasible.Firstly, this article first obtains from the company profile and the industrial characteristic, appraise on the current performance diagnose indexs and then draws out the advantage of EVA . As a large-scale telecommunication operation enterprise, China Unicom has the obvious precursor and permeability.Its industry characteristics of crowded capital, crowded technology, high risk and indefinite income influence its result of performance diagnose. Through carring on the comparison with the present performance diagnose method– net profit,ROE and FCF, EVA appears the obvious advangtage .EVA can reject the accounting information to distort as far as possible to the enterprise achievement distortion influence.EVA can make the accurate reflection on the enterprise real intrinsic value .EVA can make the dynamic reflection on the enterprise period value creation. EVA can invest reasonably the capitalization but the non-expense.EVA can pays great attention on enterprise's sustainable development, not encouraging to sacrifice the long-term achievement.Based on all sorts of superiority of EVA, this article has carried on the detailed description on the computational process, the actuation factors. Through the trend analysis and the sensitive analysis on the actuation factor , it is discovered that ,from 2005 to 2007 year, the EVA of China Unicom decreases progressively year by year, specially in 2007 compares the decline rate with previous two years to continue to increase. Explained that the company has been creating the wealth for the shareholder, but value creation ability has is weaken. The primary cause has three: First, overhead cost's rate of rise is higher than the business income net amount far the rate of rise, management profit ability hastens weakly; Second, the debt capital proportion drops year by year, in 2007 is only 5.5%, the capital structure insufficient optimization causes the weighting capital cost to elevate; Third, capital operation ability is weak, the goods in stock fund takes in a big way, the fixed asset profit ability is not strong.To explain fully the EVA value assessment method was opposite in the current value appraisal method in the China Unicom value diagnosis aspect serviceability and the superiority, this article has carried on the full contrastive analysis to two method appraisal results, Draws the conclusion finally: The EVA value assessment method and the free cash conversion of sixteenths to decimal compare, the appraisal process is more real, completely, The appraisal result can reflect the enterprise intrinsic value level accurately, Is under the new situation is helpful in accelerates to impel China Unicom to improve the management, the promotion value and the core competitiveness value diagnosis method. But it originated, the capital cost parameter in the data to determine and accountant adjusts the principle the assurance aspect still to have certain limitation.Finally, this article the business finance management question which promulgated based on the EVA model's value assessment result has also carried on the elaboration, simultaneously to had the problem to put forward the reasonable management improvement proposal.Firstly, the existence question mainly has: Whole profit ability waits for continuing to enhance, the sustained growth pressure enlarges unceasingly; The structure of investment waits for optimizing, the investment repayment level is not high; The property operation efficiency is not high, profit ability must further enhance; The capital structure must further optimize, financial leverage not full display.Secondly, the management improvement suggestion mainly has: First, uses the budget management tool fully, establishes take the enterprise value maximization as the core resources deployment system. Link up, the establishment power and responsibility budget from the EVA value assessment model and the budget model and the receipts and disbursements budget interactive mechanism and gradually guide the establishment as the central achievement inspection system three aspects realize the resources highly effective disposition take EVA, The limited resources to the high benefit region, the high added value client base and the growth service will carry on the incline. Second, increases the inside and outside excavation dynamics, promotes the enterprise whole profit ability comprehensively. The transformation growth way, uses two aspects from the management development and the resources simultaneously to promote the profit ability, the promotion benefit sustainable growth. Third, further raises the operation property turnover efficiency, reduces the fund to take effectively. Strengthens the inventory management, implements the lowest stock production control by norms, further strengthens the reversion physical distribution management, enhances the goods in stock resources to use again. Standard account receivable management, attention income quality continually improvement. Fourth, the reasonable control investment scale, the optimization structure of investment, enhances the investment repayment. The establishment investment plan appraisal model, increases according to the service category, the client base investment repayment analysis, avoids the resources waste. After establishment investment plan, the evaluation system, guaranteed that the investment has the repayment. Fifth, sets up the property management idea, increases EVA is the positive term goal investment. The perfect foundation management, from the investment source control property scale, the optimization assets structure, increases the idle asset handling dynamics, the promotion resources operational effectiveness. Sixth, increases the debt proportion suitably, reduces the fund cost effectively. Organizes the capital structure, increases the debt proportion correspondingly, realizes the debt capital and the rights and interests capital structure coordination optimization.Through the research analysis on EVA of China Unicom ,we have found a kind of more suitable and more accurate to reveal the enterprise's true value. It is purposed that EVA can guide the superintendent even to pay more attention on the enterprise internal management problems, try to promote the performance on the value creation and management continually, and finally achieve the goal of value maximization .