On the Evaluation System of EVA-BSC Business Performance of Listed Companies in Shaanxi Province

Abstract

Based on the current performance evaluation of the listed companies in Shaanxi Province, the EVA-BSC operating performance evaluation system of listed companies in Shaanxi Province is constructed with consideration of the advantages of EVA financial indicators and BSC non-financial indicators. Prior to it, the EVA financial indicators that reflect the value creation ability of the enterprise and the BSC indicators oriented by the strategic non-financial indicators performance test have been analyzed. This paper conducted an empirical research on the financial performance data of 41 listed companies in Shaanxi Province in 2017, and verified the validity and practical application value of the EVA-BSC business performance evaluation system. It is found that the EVA-BSC business performance rankings of 15 companies are generally consistent with the EVA value rankings, and the rankings of the other 26 companies differed from the EVA value rankings, which, to some extent, proved the EVA-BSC evaluation system's comprehensiveness of the evaluation of business performance, and had a good practical application value. 1. Situation of Performance Evaluation in Shaanxi Listed Companies By the end of 2017, there were 46 listed companies in Shaanxi Province, covering various industries ranging from manufacturing, finance, mining, wholesale and retail, tourism, accommodation and catering, publishing and printing, power and gas, to broadcasting and television. Among them, 28 were manufacturing enterprises, accounting for 61% of the total number of listed companies in Shaanxi Province; 4 mining companies accounted for 8%. After analyzing the financial reports of 46 listed companies in 2017, it is found that these companies shared some issues in common regarding business performance evaluation. 1. Financial indicator is heavily weighted to maximize profits. The performance evaluation indicators of listed companies in Shaanxi Province mainly include sales net interest rate, return on equity, and profit margin of main business, etc. These financial indicators do not promote to the growth and development of the company. 2. Cost of equity capital has been overlooked. The value created by excessive investment by listed companies in Shaanxi Province is less than the cost of equity capital; 3. There is inadequate attention on non-financial indicators. Although many listed companies in Shaanxi Province began to pay attention to non-financial indicators, they are lopsided with little proportion and subjective, failing to meet the expected performance evaluation goals. 2. EVA-BSC Based Performance Evaluation System for Shaanxi Listed Companies 2.1 Necessity and feasibility of coupling EVA and BSC 2.1.1 Realize organic integration of financial and non-financial indicators Theoretically, financial indicators and non-financial indicators are important components of corporate performance evaluation system. Only by combining the two can we effectively achieve corporate strategic performance evaluation goals. The traditional financial performance ...