At present, the research on circular economy has made a lot of substantive results both at home and abroad. But for the papermaking enterprise, which is the representative of the light industry, few studies have analyzed the evaluation index system of circular economy. Since the current material flow analyses have limitations that the researchers cannot calculate materials with different units. The authors take advantage of the intrinsic correlation between the basic principle of value flow analysis and circular economy, and then analyze the dynamic changes of material flow and value flow through enterprises internal production process. Considering the resource output, the authors set up the layered structure of the evaluation index system, and then preliminarily determine the index form. Next, the authors use the frequency statistics analysis method to adjust indicators, forming a preliminary index system. After that, the principal component analysis and independent analysis are applied for screening. Finally, the authors build a circular economy evaluation index system for papermaking enterprise to provide scientific guidance for the process of circular economy.