The Performance Optimization Of Budget Management Based On EVA

Since budget management occurred,it is widely adopted by various companies,and has been occupying very important position in the enterprise management.As the change of environment and the concept of enterprise management,enterprise management goal has changed from profit maximization to shareholder value maximization.The traditional budget management mode can't meet the needs of the enterprise management.Concept of economic value added(EVA)was created in 1982,putting forward by Stern Stewart management consulting companies in the United States,which represents the residual income that the enterprise's after-tax net operating profit after deducting the cost including the cost of debt and equityl is the real value created by enterprise.Compared with the traditional performance evaluation index,it puts maximize shareholder value as the starting point and end-result of all activities,so it can reflect more value created by enterprise investment management activities.In view of the important position of budget management in enterprise and the effectiveness of EVA,how to mix budget management and EVA is animportant topic.This article start from the budget management at home and abroad and the research situation of EVA,and introduce the budget management and relevant theory of EVA,then the improvement mechanism of EVA for the budget management system is analyzed.It is thought that the budget management based on EVA plays an important role in the improvement of performance.After the hypothesized,with zidong chemical industry as a case was studied,comparing the performance of zidong cheminal companybefore and after the implementation of the budget management system based on EVA to verify if it can improve enterprise performance level.Case study proved that after the implementation of the budget management system based on EVA,compared with last year,the zidong chemical industry,both in the unit product costand overall performance are improved greatly.It is concluded that budget management based on EVA is of great significance to improve the performance of enterprises.Through the research of this paper,we hope to provide reference for other enterprises to improve their management level and performance level.