The Application Of Economic Value Added In The Listed Commercial Banks

With the fast development of Chinese capital market and reform of commercial banks, the numbers of listed commercial banks increased。Till the end of 2010, there were 16 commercial banks in the capital markets。Commercial banks listed have become important component on the capital markets。In such situation, how to evaluate the operating results of commercial banks objectively and determine the investment value of commercial banks become an important issue。The core of modern corporate financial goals is to maximize shareholder value, the company's financial activities are carried out around this core issue. This article stands on the point of the shareholders of commercial banks, and makes research on the wealth creation of bank for shareholders。In evaluating the operating results of commercial banks, there are two kinds of evaluation. Traditional financial indicators and Economic Value Added indicators。The traditional financial indicators are calculated by the relevant accounting data directly from financial statements, as net profit and other accounting data are not capable to overcome the shortcomings of accounting information, there are many shortcomings in practice applications of the traditional financial evaluation。Economic Value Added (EVA) is an advanced performance evaluation tools and effective performance management system. In 1991. Jorn.Stewart and Bennett. Stewart, founders of the company Stern Stewart put forward the concept of economic value added. Economic Value Added, also known as economic profit, which is derived by deducting the cost of capital of the company on operating profit after tax (NOPAT)。In order to eliminate the impact of artificial selection of accounting standards and accounting estimates, the calculation of economic value added needs a series of adjustments, These adjustments are mainly for the net profit and equity capital which is derived from the accounting statements. Because of taking into account the cost of equity capital, EVA is a more effective performance evaluation, and could reflect the company's wealth created for shareholder better。The structure of this paper is as follows:In the Part of the empirical research, this paper reviews the literature at home and abroad。In the second Part, the paper introduced traditional financial indicators, analyzed its shortcomings, on this basis, the paper introduced the background and concepts of economic value。The third chapter of this article discusses Establishment of the EVA model of commercial banks。EVA are made up by three parts:net operating profit (NOPAT), invested capital (TC), and the weighted average cost of capital (WACC)。In this chapter, these three elements were studied。The fourth chapter is empirical part of this paper, in this chapter, the authors selected the data of 12 commercial banks listed in 2009 to Calculate their EVA, and made comparison of their Performance by using the indicator of EVA per unit of capital。At the same time, the writer studied the current operating value (COV) and future growth value (FGV) of commercial banks by using the EVA discount model。In chapter V of this article, the author made some advice。...