Research On China’s Listed Security Companies Performance Evaluation Based On The Method Of EVA

Compared with other financial institutions such as commercial Banks, the establishment of security companies in China is late, but the development is very rapid, and greatly promote the construction of the security market, adjust the financing way of the proportion. Because of the particularity of business objects, security companies face enormous risk and fierce competition from abroad to domestic. So based on the importance of security companies and risks and fierce competition, only the security company use appropriate performance evaluation method, fully and truly evaluate their business performance, find out the influence factor of restricting performance, continue to improve its strength, can make ensure of their own and industry development. To the listed security companies, performance evaluation has a very important significance to the company’s operator.. shareholders and investors, they promote mutual balances of the construction of the modern company management.However, the start of performance evaluation in our country is very late, in recent years of security company’s performance research method is much of the traditional regression equation, data envelope and DEA method; in the research content is a single company or more unilateral influence factor, such as the ownership structure, corporate governance, capital structure, etc. It is difficult to evaluate real complete evaluation Security Company’s performance in this method and content, so the drawn conclusion is debatable.The first part of this paper is to study the background and significance, the related literature at home and abroad is reviewed, after writing the content arrangement, innovation points are pointed out.In the second part, we choose four performance evaluation method:DuPont Analysis, Balanced Score Card, Factor Analysis Approach and EVA, after comparison, EVA can better reflect the performance based on three big advantage consider the shareholder wealth, reflects real company’s manage achievement; Pay more attention to the sustainable development of the company ability; Has a good stimulation. According to the characteristics of the listed security company, the EVA index system includes EVA, REVA and EVA a Share, and the calculate involves of NOPAT, TC and WACC.The third part is empirical analysis of listed security companies performance evaluation in2010, in order to accurately evaluate listed security companies, this paper selects as many security company annual report as possible and then formula the EVA index system and evaluation calculation for these firms. The results shows that in2010Citic Securities’performance is best with obvious advantages, while the bottom is GuoYuan Security, and the calculation result is negative, not only didn’t create shareholder wealth, but destructed shareholders capital. The end of this part is comparison of the performance evaluation results between EVA and DuPont Analysis, found that the result of the two evaluation method is not completely consistent, because EVA method pays more attention to equity capital and reveals deeper factor.The fourth part is empirical analysis of effect factor of the listed security companies’performance, including external and internal factor. The external factor is objective environment variable, which all companies can’t control, and have to face, including macro economy, national policy and international factor. The way of external factor influent:the first is direct influence, and the second is the indirect influence. This paper analyzes the change of external factor between2005to2010, and then selects Hong Yuan securities and Citic securities and calculates the performance of the two companies during the period, found that external factor significantly influent performance. Internal factor includes financial factor and the in-financial factor, this paper selects eight index (ROE, ROA, cost control ability, Stockholders’equity, traditional business income proportion, executives salary, Top5of shareholdings proportion, master’s degree of employees) in profitability, cost management ability, Stockholders’ equity, business innovation ability, company governance and human resources, and then establish REVA with each index. For more clear of internal factor, the end of this part, Citic securities and Pacific securities are compared.The fifth part is the ending part of the paper; this paper summarizes the conclusions and also points out the limitation of the study in this paper. First is the limitation of EVA:EVA needs a lot of adjustment, which greatly increases its complexity and difficulty. Secondly, because of data available limit, this paper can only use the2010listed security companies audited annual, so that the time of the study in relative lag, can not reflect the new situation of2011. At the same time the influence factor of security industry is very much, this paper only lists several of the most basic external and internal factor, such as company size, assets management ability, capital proportion will also influent listed security companies’ performance, this paper is lack of these factor.This paper tries to break away, the main may innovation points are:1. In the contrast between EVA and traditional evaluation method, using the theory comparison and practice comparison, in the empirical contrast, using the index position for comparison, which eliminates the difference between the concepts.2. On the analysis of influence factor of the listed security companies, using the combination of longitudinal comparison and macro analysis; using Eviews software regression equation. Of course, because of the limit of the sample, the variable selection is limited and the interpretation only stays on economic meaning.This paper is an attempt, in the hope of study that can have some reference value to the security industry.