The EVA Model And The Study On The EVA Enterprise Evaluation

There are three main methods of business valuation, the cost method, market approachand income capitalization approach. However, the cost method does not take into the overallprofitability of an enterprise, the valuation by compare approach is difficult to find a contrastenterprise for the appraised enterprise, the discounted cash flow technique dose not take intothe capital cost of the appraised enterprise, use this method we can’t estimate the value ofenterprise accurately. This paper advocates EVA valuation model.It standing on the wealthgrowth perspective to assess corporate value, make full use of all public information providedby the company, this makes the process of the method more comprehensive and the resultmore realistic, thus this method could reflects the intrinsic value of the company.EVA enterprise value appraisal method is one of the income valuation method, what’sthe different of the EVA enterprise value appraisal method is that its revenue caliber is EVAvalue. EVA value is different from accounting profit. It is an economic profit value, which isthe result of certain adjustments from net profit after tax and then deducting all the costs ofre-capitalization. If EVA is greater than zero, which means that companies create value forshareholders, On the contrary, which means the shareholders’ wealth shrink. The mostimportant feature of the EVA is that the EVA take into the cost of capital, I think it’s a verygood enterprise value appraisal method which deserved to spread.In this paper，the author sets up EVA-based evaluation models. With value investment asthe gulding ideology and the EVA as the main line，the author uses the method of documentalanalysis and case analysis to focus on the study to assess the enterprise’s value based on EVAvaluation model．Through the detailed application study in AB enterprise’s value assessmentbased on EVA valuation．The author explores the use of EVA in the evaluation of Chineseenterprise’s value．...