An Analysis of the Value Creation Ability of Listed Companies in Shandong Province Based on EVA

Abstract

Economic Value Added (EVA) is an index used to measure the value creation ability of a company. It adds the same weight to the cost of equity capital and the cost of debt, which can objectively reflect the wealth that are created by the company. As the backbone of economic development in Shandong Province, the states of listed companies reflect and influence the overall economic development in Shandong. This thesis applies the annual reports from 2005 to 2009 as the samples to analyze the value creation ability of listed companies in Shandong province. The results show that the states of all the listed companies in Shandong province are good and most of them have created value for their shareholders. However, the differences among different companies are huge. There exists serious polarization.