Open AccessIntroduction to Eva Method and Corporate Valuation - taking Tsingtao Brewery as an Example
Author(s) -
Wen Fan
Publication year - 2020
Publication title -
iop conference series. materials science and engineering
Language(s) - English
Resource type - Journals
eISSN - 1757-899X
pISSN - 1757-8981
DOI - 10.1088/1757-899x/768/5/052128
Subject(s) - economic value added , residual income valuation , profit (economics) , weighted average cost of capital , valuation (finance) , business valuation , business , shareholder , accounting method , cost of capital , economics , accounting , finance , microeconomics , financial capital , capital formation , corporate governance
EVA (Economic Value Added) method, namely the performance evaluation method of Economic Value Added, is a method of business performance proposed in view of the defects of traditional accounting profits. The advantage of EVA method is that it reflects the value-added income obtained by shareholders from business activities. Generally speaking, EVA is equal to the balance of the enterprise’s after-tax profit after deducting the cost of equity capital and debt invested. Taking tsingtao beer as an example, this paper analyzes the enterprise valuation by EVA method.