EVA Application In The Financial Early Warning Of Small And Medium-Sized Enterprise

With the economic globalization and increasingly fierce competition in the market, the small and medium-sized enterprises in our country are facing unprecedented impact and challenges, accompanying the technological progress, besides the higher and higher degree in the company's informatization. Therefore, in order to establish a scientific and effective financial early warning system to help enterprises to avoid risk, realizing the sustainable development of enterprises is particularly important. Based on the clearing up and conclusion with the previous domestic and abroad relative document, first of all, the article expounds the theory basis for the enterprise financial early warning based on the EVA in the small and medium-sized enterprises. Secondly, it introduces briefly the EVA application in financial early warning of the enterprise of the small and medium-sized enterprises. Thirdly, it sets two financial early warning systems from the operation ability, profit ability, debt payment ability and development ability, based on the financial situation of A company in 2014. In addition to that, it calculates the corresponding financial early warning indexes in the traditional financial indexes from the relative financial data of the A company in 2014, in the same time, it makes a comparative analysis in the financial early warning results in the two index system. Finally it puts forward the suggestion for completing while the small and medium-sized enterprises make use of the EVA financial early warning index. Since the introduction of the EVA index to China, it makes no further progress, until 2013 the State-owned assets supervision and administration commission issued about the 2013 the notice on the operating performance evaluation work for the central enterprises, in which it clears that the EVA evaluation should be promoted in state-owned enterprise to make EVA more and more familiar and accepted by people. But because of the limitations of many indexes in obtaining, which leads to EVA index is more capable in the state-owned or public company, fewer of them was used by small and medium-sized enterprises while makes the research of the financial early warning using the EVA so far. This paper aims at promoting the application of EVA in the enterprise financial early warning among the small and medium-sized enterprises.