The Influence Of EVA On The Listed Company’s Share Stock

EVA (Economic Value Added) is created by Stern Stewart management consultingcompanies in the financial indicators, it fully reflects the company’s financial managementobjectives to maximize shareholder wealth, EVA think the company is to bring Value forshareholders, its return on capital must be more than the cost of their invested capital in orderto obtain the revenue. EVA is different from the traditional accounting data, because it notonly considers the equity capital, but also considers the enterprise all capital, embodies theconcept of economic profit, in particular, different processing of "cost of capital", is thebiggest difference between the two. Traditional accounting profit only considers debt capitalcost, but EVA fully considers the company, including debt capital and equity capital. In thecalculation of EVA, weadjust the corresponding courses in financial statements, to distortthecorrect traditional financial indicators on enterprise value, reflect theperformance ofenterprises, effective measures the changes on the wealth of shareholders.The operating performance and value creation ability decide the share price of the listingcorporation, EVA is a good indicator of business performance evaluation, this paper selected200shares of a stock market as the sample, to verify the effectiveness of the EVA in China’scapitalmarket, looking for the relationship between EVA and shares of listing Corporation.This paper first analyzes the basic theory of EVA and stock price effect, points out the keyelements of company stock price evaluation is to establish proper performance evaluationindex, then clarifiesthe calculation of EVA process and the need to adjust the accountingsubjects, followed by thecomparison between EVA index and traditional performanceevaluation index, pointed out the superiority of EVA index. Then explains the factorsthat influence stock prices, the assessment of EVA index is applied to thestock price. Inthe subsequent empirical research, collection of the Shanghai and Shenzhen two city200Sample Firms from2010to2012,3years of data, to calculate the capital asset pricingmodel,based on the calculation of the cost of equity capital and the value of EVA, between theEVA andtraditional financial indexes and stock price correlation analysis andmultiple regression analysis,the conclusion and analysis of the reasons for this conclusion, finally analyzed the EVA deficiency in practical application, and the application in Chinaand suggestions.