Shan Xi Electric Power Company Based On EVA Research On Management Performance Evaluation

With the extent of China’s integration into the globalization increasing, domestic scholars get to know more and more advanced international financial concepts, EVA being one of them. In 2010, SASAC started to apply EVA Performance Assessment System first to state-owned enterprises(SOE). With EVA being the core indicator of value-based management, the implementation of this assessment system will be an important initiative to improve the performance of SOEs, and add their corporate value. The thesis aims to use this measurement to evaluate recent operating performance of a provincial SOE- Shanxi Electric Power Company(SEPC).Presently the most popular performance assessment method in China is financial indicator analysis method, based on analyzing the relative indicators of balance sheet data,contributing greatly to the corporate development during the rapid growth period of Chinese economy. With the development of society, the traditional evaluation methods become less suitable to the corporate performance management, and many new ideas have emerged, such as EVA, Balanced Scorecard and so on. In such a period of huge changes on the concepts of performance evaluation, the studies on how companies adopt new performance evaluation system is instructive.At the beginning, the thesis gives an overview of the current research at home and abroad relating to EVA. Next the thesis uses the current widely used method to evaluate the performance of SEPC in 2012 to 2015, and gets the conclusion that its overall financial indicators are good while other indicators are not compared with benchmarks. Based on the conclusion, the thesis summarized the shortcomings of traditional evaluation systems. The fourth chapter of the thesis conducts another performance evaluation by SASAC’s EVA assessment system on the company, and finds out that EVA can give a more authentic view of the financial situation compared with traditional measure. The traditional method may inflate corporate earnings. The thesis also points out that two evaluation methods can both reflect the trend of businesses operation, only that EVA being more advanced. In Chapter 5, by summarizing the successful experience of both Siemens and China Mobile Communication Corporation on performance management, the paper proposes that SEPC should gradually adopt EVA assessment system together with the Balanced Scorecard evaluation method.