Study On The Application Of Economic Value Added(EVA) In The Corporate Performance Evaluation

This paper mainly describes the use of EVA as a method of performance evaluation. Compare with the traditional performance evaluation,such as net income, residual income, that the EVA as a performance evaluation of the pros and cons is obvious. At the same time discussed the theoretical basis of the EVA value of creativity and a qualitative analysis of the value of the creativity of the EVA. Drawn from the practical importance of the value management concept driven EVA applications. For users outside the company, the EVA can be the best indicators for the evaluation of corporate performance. EVA can guide enterprises to establish the concept of value management, improve the ability to create value.In the concrete application of the EVA formula, first we can see from the definition of EVA shows the most important factors affecting the EVA is net operating profit after tax(NOPAT) and capital costs. Secondly, to provide more accurate results of operations, traditional accounting data need necessary adjustments. This paper explains the principle of the adjustments and how to adapt it; analysis and appraisal in line with our market and actual conditions of the method for determining the cost of capital, so the final calculation of the EVA value. This paper uses the case analysis, China Petroleum (601857) is the flag ship company of EVA Ranking in recent years. I hope this paper can Provide help for the people who want to use EVA to evaluate the Performance of a corporation.