Analysis On The Theory And Application Of EVA In The Performance Evaluation Of Listed Companies

According to the current mainstream idea, the ultimate goal of the enterprise is maximizing the owners'wealth, which requires the indicators used to measure a enterprise's operating results to reflect the value created by the company accurately. The traditional indicators can't reflect the value of the company, because they neglect the cost of owners'capital, and give a large room for profit manipulation. Compared to the traditional indicators referred to accounting profit, EVA (Economic Value Added) is a new indicator used to measure the enterprise's operating results, the biggest advantage of it is taking the cost of all factors of producion into consideration, which is consistent with the definition of profit in economics, so it can reflect the enterprise value created for shareholers in a certain period. The theory of EVA has been used widely abroad after it was generated, and it has become a important supplement to the traditional measure system. In the recent years, as the market-oriented economy developed, this concept was introduced into China gradually, then researchs and explorations have been launched by the sectors of theory and practice.From the perspective of a indicator of performance evaluation, this paper is based on the previous studies, summarized to absorb the reasonable element of them, and the made its own ideas, assumptions and conclusions. The paper begins with the theoretical background and development process of EVA, describes briefly the status of the use of EVA in China, the writing ideas and research methods; in the second part for preparation, the status of enterprise's performance evaluation indicators in China is discribed, and then realizes the shortages of the current indicators like they can't reflect the cost of rights and interests, may lead to behaviors for short-time, and so on. The important part of the paper begins with the theory system of EVA, describes the basic model and substance meaning of EVA, as well as its advancetages like definiting the profits from the view of shareholders, correcting some distortion of accounting information, etc; and then analyzes the problems should be solved to promote the use of EVA in our country,like changing the ideas about enterprise's performance evaluation, making the accounting information more ture, disposing the bad assets, and so on..Next, according to the accounting standards of China, the paper discusses something involved in the calculation of EVA, and analyzes how to calculate the cost of shareholders'capital, gives suggestions on it. Then, do a case study for analysis by choosing the tyical companies, EVA of the choosed companies are calculated to evaluate the companies'performances and then make financial analysis. In the end, combining wih the theoretical research, make the conclusions, and point out the shortages of the paper and some related proposals on how take EVA into implement in a better way.