Abstract There are many factors, such as long-term depression and industrial moving, to induce Taiwanese corporations into financial distress since the Asian Financial Crisis erupted in 1997. In research of financial distress, it¡¦s difficult to distinguish the exact factors that whether financial aspect or other aspect cause financial distress. Management normally will take improvement actions in operation or financial respects when it perceives certain aspects getting worse. In practice, organization reforming and changing top management team may be the most popular and effective solutions. But, the effects for adopting such actions are uncertain. Therefore, those financial-distress corporations after taking successful improvements in change management are worth the research of its improvement procedures and methodologies. Many researchers evaluate corporation performance using certain financial ratio such as earnings per share (EPS), return on equity (ROE), and return on investment (ROI). According to the earning calculation as required in Generally Accepted Accounting Principle (GAAP), some expenditures which will make corporation benefit from a long-term respect are expensed currently. This result may understate current period and overstate future period earning and assets. Management may reduce this kind of expenditures when EPS is the only indicator for performance evaluation. Economic Value Added (EVA), one valuation method based upon residual income, will improve above-mentioned shortcomings of traditional performance evaluation. The major concept of EVA is that adjustment of accounting accounts is necessary to get real value of corporation and corporation needs to earn profit exceeding return of costs of capital to create value of shareholder. The case in my research, Y company, expanded its investment in Compact Integrated Steel Mill project which was announced in 1992. However, after Asian Financial Crisis in 1997, Y company¡¦s operation was getting worse and was unable to repay its bank loans. Y company then became a financial-distress corporation. The top management was changed after the majority shareholdings of Y company were transferred to C company. Since ownership change, Y company made organization reforming with ¡§Theory E¡¨ first and ¡§Theory O¡¨ second. We adopt EVA as the vehicle to assess the performance of new management¡¦s improvement. In our research, EVA of Y company was turnaround after C company¡¦s acquisition of Y company¡¦s shareholdings and its top management was totally changed. Keywords: Financial distress, Change management, Theory E, Theory O, Economic Value Added, EVA, Residual income.