The Study On Methods Of Establishing Non-Financial Measure System

As the external and internal environment of business management has changed fundamentally and new management theories and technologies have kept emerging, the traditional financial information system has become inadequate to meet the information requirements under the new circumstances due to its inherent limitations. It is necessary to incorporate non-financial data in the financial information system to help management focus on key competitive factors and make sound decisions. Although some models have been proposed to combine financial and non-financial measures, the question of how to select specific non-financial measures has not been answered. To address this problem, this thesis discusses important considerations in non-financial measures selection and proposes a method to establish non-financial measures system and select specific non-financial measures based on the process of value creation.This thesis begins with a detailed analysis about why it is necessary to make use of non-financial measures. Next, this study discusses the basic principles and important considerations in the design of non-financial measures. Based on the previous discussion, the thesis proposes the method of constructing non-financial measure system based on the value creation process and selecting specific measures using Fish Bone Diagram and Analytical Hierarchy Process.This thesis continues to demonstrate that the non-financial measures developed in the described way can be used in the fields of performance assessment, corporate value evaluation and business strategy management. Finally, the study points out the shortcomings of non-financial measures and some reasons for the ineffective use of non-financial measures. The study concludes by recommending that at present businesses combine non-financial measures and financial measures to increase the relevance between the financial information system and the business strategy and to improve the business management level.