The Empirical Study On The Impact Of Capital Structure On Eva Of Listed Company In Information Technology Industry

The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has adopted EVA (economic value added)to assess the performance of State-owned enterprises, which shows that the significance and advantage of using EVA as a performance evaluation indicator is increasingly prominent. EVA is the gain(or loss) that remains after levying a charge against after-tax operating profits for the opportunity cost of all capital, including equity and debt-the cost of capital is taken into consideration when assessing the performance of a company. So the cost of capital is a critical factor that determines the value of EVA, and the cost of capital is influenced by capital structure, meanwhile, many noted capital structure theories have illustrated how capital structure affects the performance of corporate through financial leverage effect and corporate governance effect. Some scholars have carried out empirical research on the relationship between capital structure and traditional performance evaluation indicators, such as net profit, profit margin and return on asset etc. Their conclusions are not all the same due to the difference in researched industries, variables and development stage of companies.As EVA is becoming an important performance evaluation indicator, it has certain practical and theoretical significance to study how to increase EVA by improving capital structure bases on the relationship between them.Information technology industry has become increasingly important in our national economy. It is an industry of high risk and high investment, which may make the relationship between capital structure and EVA more important, and there is not any empirical study on the industry so far. This thesis focuses on empirical analysis to test how the capital structure will influence the performance of listed companies in IT industry. In the paper, the ratio of debt to asset, long-term debt ratio, short-term debt ratio and ownership concentration are used as variables to reflect capital structure. The performance of listed companies is measured by EVA, corporate scale and the share holding proportion of the State are introduced as controlling variables. The result shows that EVA firstly increases and then decreaseswith the rise of debt-assetratio, and has significantly positive correlation with ownership concentration.Finally, based on this conclusion, the paper puts forward suggestions on how to optimize the capital structure, in order to improve company performance.