Valuation Study Of Tisco Based On Eva

With a series of iron and steel enterprises to carry out frequent property transactions, such as: M & A restructuring, seeking venture capital, etc., the market competition of iron and steel industry is increasing. The Business objectives of Enterprise change from the profit-maximizing business objectives to maximize the value. How to assess the value of iron and steel enterprises is becoming the key problem. Traditional accounting indicators show some limitations, when assessing corporate performance. In the face of the new situation, there are more connections between EVA and corporate value creation.This paper will apply the EVA valuation model in the valuation of iron and steel enterprises. The biggest advantage of EVA is that it concerns more in earnings and growth of an enterprise in the view of shareholders. This paper analysis's 2006-2008 annual report of TISCO to reveal the factors which influence the calculation of EVA. In order to prove that compared with the traditional valuation models EVA has its own advantages in assessing iron and steel enterprises, this paper compares among EVA, business net profit and free cash flow. The research shows that EVA is more effective than traditional valuation models in the field of iron and steel industry.This paper is divided into five parts: the first part is Introduction, which introduces the background, purpose and research framework; the second part introduces TISCO, including the development of stainless steel enterprises and the survey of TISCO; the third part describes the theory of EVA and compares EVA and other general valuation methods; the fourth part is the most innovation and important part of this paper, the research on TISCO shows that EVA can truly reflect business performance and effectively enhance the internal management; the fifth part is the conclusion of this paper which presented the findings and shortcomings .