| Comprehensive budget management has been applied as a central position in the business management system, since it was set up in Du Pont Enterprise and General Electric Enterprise in1920s. With the rapid development of science, and the accelerating pace of economic globalization and integration, the capital market was constantly improved. The value maximum shareholder brought out became the initial point and the ultimate point of all activities of the modern enterprise. The concept of economic value added(EVA) originated in1982, which is the net operating profit that make up all capital costs including the cost of equity capital. EVA is a new comprehensive evaluation of the enterprises’operating results. Comparing with the traditional accounting indicators, it is more relevant in corporate value creation, and more truly reflectingt the profitability and economic efficiency of enterprises.The enterprises have been in a rapidly changing business environment and an increasingly competitive market. In a foreign country, EVA has been a lot of well-known international companies adopt and achieved great results, but the concept of EVA introduces into China short time ago, mainly remain in EVA theoretical research. According to the SASAC announced "Interim Measures for the operational performance assessment of the person in charge of the central enterprises", in2010, EVA will be an important indicator as a performance appraisal system. How to systematically use EVA, to establish our comprehensive budget management system based on EVA becomes an important research topic.The paper summarized the existing achievements of the budget management and EVA theoretical research results at home and abroad, analyzed present enterprises’situation and budget management system. It also emphasizes that it is necessary to bring the EVA philosophy, and establishing a comprehensive budget management system based on EVA. This paper analyzes the value driving factors of EVA, as well as the theories such as value management, residual income and rincipal agent relationship, looking for a combination of EVA and comprehensive budget management. Thus with the connection of EVA theory and overall budget management, it has improved the allocation of resources, the agency relationship and internal communication, so that the budget can adapt to environmental changes, seek a comprehensive budget management, and improve the competitiveness of enterprises. Through both the theoretical discussion and case studies, EVA is a starting point of the comprehensive budget management system architecture and also the aim of budget implementation. The model includes constructing principles, content, controlling, analysis and evaluation, that is, a PDCA cycle from the EVA back to management and achieving the enterprise value. Finally, combined with the budget management case of SJ Steel Company, by analysing its present situation of budget management, pointed out the problems existed in budget management. Through this part of the case, make the comprehensive budget management of enterprises based on EVA operated.Contingency theory suggests that the management style is a response to the changes in the internal and external environment. Traditional comprehensive budget management divorced from the corporate strategy. Enterprise organization has not been full used. If only absorbed the advanced management concepts and methods, improving the present management system that in order to meet the needs of the business management. Inevitably there are some problems exist in EVA theory and method. EVA-based comprehensive budget management also needs to improve and development in practice. |
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