The Study of Businesses’ Total Budget Managing System Based on EVA
|School||Harbin Engineering University|
|Keywords||Comprehensive budget management EVA Value Management|
Near the modern sense, budget management has been from the early 2nd century DuPont, General Electric Company, has been widely used in Chinese and foreign enterprises has become an important part of enterprise management systems. With the social development, economic globalization, the acceleration of the integration process, value creation become the starting point for all activities of the modern enterprise, and comes down, to maximize shareholder value has increasingly become the pursuit of business objectives and important mission. Enterprise value creation activities require powerful management tool. Traditional budget management how to adapt to changes in the environment, with the goal of value creation fit for the enterprise target service, become a realistic and urgent issue. Economic Value Added (EVA-Economic Value Added) from profits in the economic sense, is made up of the surplus after all costs including the opportunity cost of shareholders' investment. In 1982, the Stern Stewart EVA-based financial management system, decision-making and incentive mechanisms. Its basic idea is that the company must earn more than the cost of capital remuneration to the creation of shareholder value, so to maximize shareholder wealth. Essence is given a measure of economic profit and value management as a tool. EVA then achieved great results in the application of foreign country there are some companies applied. Approach to performance appraisal in accordance with the SASAC in 2010, EVA will serve as an important indicator of the assessment system. Budget management and EVA Research departure from home and abroad to discuss the current situation and existing problems of the comprehensive budget management, highlighted the current overall budget management goals and business value creation target deviate from the core issue, proposed the introduction of EVA thinking, the need to build a comprehensive budget management system based on EVA. This paper analyzes the theoretical basis of the EVA on EVA reflects the value of management, the ideological content of residual income, principal-agent relationship, find the EVA theoretical support for the introduction of budget management. The EVA introduction of budget management is the organic integration of management tools and supplements. Further EVA introduction of improved budget management: to improve the agency relationship, improve the allocation of resources, improve internal communication and coordination, budget to adapt to environmental changes, and finally to budget management path to value management, to achieve docking with the fundamental goals of the enterprise , to enrich and improve budget management as a management tool functions and utility. Theoretical explanations, based on the business needs of practice, proposed a comprehensive budget management system based on EVA building architecture, including building principles, content system, execution, control, analysis, evaluation and other aspects. Initially completed based on of EVA comprehensive budget management model structures. Finally, A petrochemical company as a case study, analyze the status of its budget management, pointed out the problems of its budget management. A petrochemical company is given specific recommendations on the establishment of a comprehensive budget management system based on EVA based EVA comprehensive budget management system should pay attention to the problem described. Contingency theory suggests that systems are managed in response to changes in the environment. Traditional budget management only absorb advanced management ideas and methods to adapt to the needs of management. EVA theory and method, there are some drawbacks and problems, based on EVA comprehensive budget management in practice also need to continue to improve and development.