Study On The Value Creation Ability Of Gansu Minhai Pharmaceutical Limited Company Based On EVA

With the development of market economy and the enhancement of enterprise management pattern,the main finance target of domestic enterprises currently is transforming from maximum of profit to maximum of value.In order to adapt to this change,EVA is widely applied to more and more fields.The so-called EVA is regarding shareholders’ value as center.Only if enterprises’ profit reached total costs,can shareholders make profit and their investment value be guaranteed.The concept of EVA find a new development direction for the creation of enterprise value.Since 2007,SASAC has proposed several times that regard EVA as the assessment model of enterprise value creation ability in order to ensure the hedge and increase of enterprise value.In addition,the management pattern which focus on the creation of enterprise value has become principal development direction.Gansu Minhai Pharmaceutical Limited Company is a private enterprise and mainly participated in pharmaceutical manufacturing.From the perspective of finance,currently,the company still continued their traditional profit maximum management pattern,which obviously badly affected company in fiercely competition.Therefore,carrying out EVA is of great importance to Gansu Minhai Pharmaceutical Limited Company.Through the enhancement,EVA could gradually realize the value maximum of enterprise,which could conform to the development direction of enterprises in the future.Beginning with the basic concept of EVA and through the estimate of Gansu Minhai Pharmaceutical Limited Company ‘s operating profit after tax,investment cost and capital cost,this thesis constructed a general model for EVA value creation.The EVA estimate result revealed that the value creation ability of Gansu Minhai Pharmaceutical Limited Company is pretty low.Based on the result and started with many value driving factors,including profit ability,capital turnover ability,capital structure and capital cost,this thesis researched the problems and issues existing in the value creation of Gansu Minhai Pharmaceutical Limited Company.The research revealed that there are a great number of issues and problems existing in Gansu Minhai Pharmaceutical Limited Company,such as low profit ability,weak capital turnover ability,low debt proportion in capital structure,the ignorance of enterprise value management,the deficiency of perfect value management assessment system and inadequate investment in new productsresearch and development,which,to some extent,fettered the improvement of enterprise value creation ability.In terms of existing problems of Gansu Minhai Pharmaceutical Limited Company and in order to enhance enterprises’ value creation ability,this thesis proposed many proper suggestion and advice,including the enhancement of enterprise profit ability,the improvement of capital turnover,the optimization of enterprise capital structure and the increase of investment in research and development.The conclusion of thesis could provide other companies in the field of pharmaceutical manufacturing with some reference related to the enhancement of value creation ability.