Performance Evaluation Index System Research Based On Cash Flow In SC Company

With the rapid development of market economy, business operations have become increasingly complicated, which made enterprise performance evaluation become a demand for the development of market economy. Establishing a complete performance evaluation index system has become an indispensable requirement for the development of enterprises. Nowadays, many listed companies in China are attempting to polish their financial statements. Meanwhile, the enterprise performance evaluation index system in China is mainly data-sourced from the income statements and balance sheets. On this basis, the current evaluation index system may be lack of accuracy and fairness. Whereas cash is the most basic resource for corporate operations, it is the foundation of corporate value creating and measurement. Generally, the authenticity of information in the statement of cash flows is not affected by the accounting policies and accounting estimations. Therefore, the performance evaluation indexes based on cash flow can make up for the shortage of traditional accounting indicators, which further improve the accuracy and completeness of enterprise performance evaluation results.This article uses literature research, case analysis and investigation method to study the real case from author’s internship company-SC Company. This article aims to find out the deficiencies of current enterprise performance evaluation index system of SC Company, and tries to establish a new evaluation system based on cash flow of SC Company. This article is organized in five chapters:the first chapter is an introduction. This chapter illustrates the research background, purpose, contents and methods of this study, and summaries the relevant research results, as well as the study innovation and features. The second chapter is basic theory review, which mainly introduces the concepts of cash flow and enterprise performance evaluation, and discusses the theories of enterprise performance evaluation system based on the relationship between the above two concepts. The third chapter gives a comprehensive introduction of the SC Company’s current performance evaluation index system, and a discussion on its deficiencies. The fourth chapter is the core part of this article. This chapter emphasizes the importance of cash flow in enterprise performance evaluation index system, and designs a cash flow-based evaluation index system that can be applied to SC Company. The fifth chapter draws conclusions and prospects. This article proposes that the proportion of cash flow index should be increased in the enterprise performance evaluation index system, and the index of accounting profits and cash flow should be integrated considered in enterprise performance evaluations. Enterprises should also strengthen the management of their cash flow, account receivables and inventories. The main contributions of this article are:1. Emphasizes the significance of cash flow index in the enterprise performance evaluation index system.2. Emphasizes the significance of cash flow management in enterprise performance.3. Provides an academic reference of establishing the cash flow-based enterprise performance evaluation index system for listed companies.