| Issue |
SHS Web Conf.
Volume 170, 2023
2023 International Conference on Digital Economy and Management Science (CDEMS 2023)
|
|
|---|---|---|
| Article Number | 03001 | |
| Number of page(s) | 6 | |
| Section | Enterprise Operation and Human Resource Management | |
| DOI | https://doi.org/10.1051/shsconf/202317003001 | |
| Published online | 14 June 2023 | |
Discussion on EVA Performance Evaluation Standard of Central Enterprise Based on WACC Valuation
Chemical Engineering, University College London, London, WC1E 6BT
Weighted average cost of capital (WACC) is a method of calculating a company's cost of capital by weighting the weight of each type of capital to the total source of capital.Economic Value Added (EVA) is the net operating profit after tax of an enterprise minus the opportunity cost of all invested capital including equity and debt. Given the "one-size-fits-all effect" of WACC in the evaluation of central enterprises' performance, this paper uses PetroChina as an example to verify whether there is an "inflated" or "overestimated" EVA in the evaluation of central enterprises' performance through the valuation of WACC. The results show that the relatively small WACC in EVA performance evaluation directly leads to the EVA overstatement of PetroChina. National industries are classified according to the competitiveness of industries in terms of economic value added creation and contribution. Replacing the current EVA evaluation criteria with EVA rate evaluation criteria or Delta EVA evaluation criteria is a more practical idea to solve the problem of "overstated" or "overestimated" national EVA.
© The Authors, published by EDP Sciences, 2023
This is an Open Access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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