Research On Application Of EVA Performance Evaluation In The Central Enterprises

The modern financial management theories take the maximization of shareholder wealthas the business goal. The traditional enterprise performance evaluation system isconstrueted on scale profit一center basis, but it ignored the cost of capital in theprocess of enterprise capital operation, so it can’t accurately reflect the real value createdfor shareholders..Economic Value Added(EVA)，which based on the value creation system,overcame the drawbacks of traditional accounting indicators, taking into account the cost ofequity capital, so it can more realistically reflect value creation capabilities of enterprises.SoEVA attracted widespread attention.As China’s capital market has expanded rapidly, andthe corporate governance environment improved constantly, the performance of centralenterprises caused for more and more concerns of different stakeholder.They no longeronly focus on the traditional indicators such as income and profit., but will pay moreattention on the enterprise’ s ability of value creation.State-owned Assets ManagementCommittee take EVA into the assessment indicators of central business performance since2010. So how to fullly implement the EVA evaluation and management in the state-ownedenterprises, especially in the central enterprises is an important issue.First of all，the author briefly described the background and significance of the paper,consolidated the present situation of the EVA study at home and abroad. Secondly, thispaper introduced the theoretical basis of EVA such as its origin, meaning and substance.Meanwhile it analyzed the calculation and accounting adjustments of EVA, then introducedthe evolution of the central business performance evaluation. Subsequently this paper raisedproblems in the implementation of EVA performance evaluation according to the actualsituation of central enterprises and put forward corresponding countermeasures andsuggestions. Finally the paper studied EVA cases, and concluded that the EVA used inperformance evaluation is a shortcut to promote the central enterprises to improvemanagement and enhance the value creation capabilities.This paper is based on the background that EVA has been adopted in the centralcorporate performance assessment and found many practical problems encountered in theimplementation of the EVA performance evaluation in central enterprises.Through the application of EVA in Changan Auto, the case demonstrated nearly four years of EVAcalculation and further calculation of relative EVA index series. Then it took practice intoCorporation of EVA countermeasure. The central enterprises should focus on aspects whichbenefit for long-term sustainable development, such as the unique training and the EVAevaluation system improvement, meanwhile strengthening the industry standard assessmentand continuing to enhance the EVA. The study of case demonstrated that the effect ofEVA application was significant.The expection of this researeh is to provide referencefor the further application of EVA performance evaluation in our country’s centralenterprises.