The Enterprise Performance Assessment System Based On EVA

At present, China faces complex international and domestic economic environment. On the one hand, the multipolar world develops further, the world balance of power changes significantly, and the world economic dependence and influence on each other raise to a higher degree. On the other hand, the government issues the twelfth five years planning, which requires to speed up the industrialization process of information, improve the quality of industrialization and enhance the level of information. What’s more, increase the opening efforts, develop new open space, improve utilization of foreign capital, increased share of overseas investment, and foster new competitive edge in international economic. It is important to build the EVA performance measurement system so that the enterprise can win in the fierce competition.This paper mainly use standard research methods to analyze the necessity and feasibility of the integration of EVA and BSC, and then propose the Performance Evaluation System based on BSC framework and cored by EVA, according to comparing advantages and disadvantages of EVA and BSC. Next design Specific evaluation indicators and the corresponding incentive system.In the end promote problems the use of the system will face, and propose countermeasures.The contents of this article is divided into seven parts:ChapterⅠ, introduction. First introduce the research background from international and domestic environment of China’s enterprises, then ideas and methods of this research, the structure of paper,and expected innovation and inadequate last.ChapterⅡ, theoretical basis and literature review.Theoretical basis section introduce five theories which support this paper:the principal-agent theory, corporate governance theory, stakeholder theory, motivation theory and transaction cost theory. Literature review part comments EVA theory from the point of view at home and abroad. From foreign literature, we can see the origin of EVA theory, the feasibility and superiority of EVA as a performance evaluation, the research about the relationship between the agency problem, the incentive problem and EVA. From domestic literature, we can see the causes of the peak and trough of EVA,and then divide the researches on EVA into three times, and summarize the literature of each period.ChapterⅢ, EVA-based performance evaluation perspective of the enterprise: principles and commentary. Although EVA performance evaluation system can measure the real value of the companies, shareholder wealth and avoid short-term behavior, yet it does not combine with business strategy, and not contain evaluation of non-financial indicators. So this paper introduced the Balanced Scorecard (BSC) the idea into EVA framework in order to give full play to the effectiveness of the two and more contribute to long-term strategic business objectivesChapterⅣ, This chapter is the building of enterprise performance evaluation system based on the EVA perspective. This chapter is the key chapter of this paper. In this part the writer proposes the building system formulation in accordance with the principle of the building performance evaluation system, taking EVA as the key indicator of financial dimension BSC, putting it on the top of the performance evaluation system. The writer takes advantage of the prospective dimensions in BSC to increase EVA, there are custom dimension, internal operating and management process, learning and growth, developing long development strategy of enterprise. The writer identifies the key financial and non-financial indicators which are the driven factors to increase the value of enterprise through breaking down the EVA and sensitive analyzing. These indicators combining with EVA forms a chain of causality which runs through all levels and nodes in the enterprise, and formulate the enterprise performance evaluation system which based on the EVA perspective. Furthermore, the writer sets the specific evaluation indicators in accordance with analyzing system architecture, and sets related incentive policy----the bonus and bank plan of EVA. At last, the writer analyses thee factors which influences the evaluation system, completes the theoretical research of EVA.ChapterⅤ, a case applying EVA performance evaluation system on Guang Tong Co., Ltd. This chapter first introduces the CLP Guangtong Inc. company’s background, organization and the company’s existing performance evaluation system. And then use EVA performance evaluation system which this paper design in the company, and pointed out the problems in application of the system,too.ChapterⅥ, The chapter is the suggestions to the application of the enterprise performance evaluation system which based on the EVA perspective.This chapter gives some comments on the Chinese current EVA evaluation method. The temporary evaluation method to central enterprises’managers’ operating performance>, indicating its features and inadequacies. The writer proposes the following three suggestions in accordance with the new situation and chance the performance evaluation method faces currently. Firstly, we need to transfer our operating ideas in order to create favorable environment to the promotion and application of EVA; Secondly, we should build stable and easy using EVA in accordance with the reality and promote the effectiveness of EVA; Thirdly, we should improve the accounting report’s quality and guarantee the effectiveness of EVA.ChapterⅦ, The main contributions of this paper are as follows. Above all this paper helps to improve the enterprise performance evaluation theory system. The previous theory mostly only focus on the financial indicator, paying less attention on the enterprise strategy and non-financial indicator. This paper based on the EVA perspective and just make up the previous theory’s inadequacies. Furthermore, this paper helps to improve enterprises’agency relationship and corporate management, coordinating the benefit between the owner of enterprise and the operator of enterprise, reducing the short-term behavior of the operators. Lastly, this study is also important for the guidance of the enterprise behavior, improvement of enterprise core competitiveness and rational allocation of the enterprise resources.There are also some inadequacies of this paper. The writer tries her best to study the EVA in all point of view, wants to reveal the influence of the EVA and related incentive indicators, however due to the limited space the writer only focuses on the key factors which influence the EVA and the bonus and bank plan of EVA to analyze. In addition, this paper doesn’t consider the social responsibility of the enterprise which more and more valued by the academia currently when designing the non-financial indicator...