Research Qn The Comparason Among Net Profit, Cash Profit And EVA

Net profits, cash profits and EVA are currently not only the main indicators of enterprise performance evaluation, but also the indicators that the various stakeholders to refer to when making an important investment decision. The modern enterprises enter to a new stage that continues to create value and maintain the sustainable development of enterprises as the core value of the management. However, what kind of relationship between the accounting profits, cash profits, EVA and enterprise value and how to explain it, the scholars have not reached a definite conclusion.This paper selected financial data from Shenzhen and Shanghai A-share listed companies of the manufacturing industry in2007-2010fiscal year. The efficiency of transmission about the information of enterprise value among EVA, traditional accounting profit and cash profit was studied. And on this basis, accounting profits, cash profits and EVA are compared to other indicators of their incremental value of information transmission efficiency. The last part of the contents is empirical research that if the above three types of performance indicators provide the basis for decision making to the various stakeholders, and whether the transmission efficiency of their enterprise value has any change. In this section, the following conclusions were reached:for only consider two types of performance indicators or only can get two types of performance indicators, cash profits and EVA combined maximum value of transfer efficiency; and if the three performance indicators are considered will increase value of the transmission efficiency, but compared to the cash profit and EVA combination, it improves the efficiency of transmission about the information of enterprise value is not obvious. Only considering the cash profit and EVA will be able to provide the necessary basis that could help make rational business decisions for investors.