The Application Of Dynamic Financial Index In Project Management

This thesis study the feasibility and application to adopt a series of dynamic indexes instead of static financial index in traditional budget and final accounting system, the new dynamic index can indicate the time value of money and cost of capital, so that it can greatly improve the efficiency of capital and better control the cost in project.The Chinese economy is getting more and more market-oriented, and competitions are getting tougher and tougher. The companies are forced to adopt new technology and management method to reduce the cost, maintain competitiveness in market. In project management, in many yeas' practice, people work out a target cost control and system base on evaluation the budget and final accounting model. The core value of target cost control is to reduce the cost, increase the yield with setting and control the financial index in project management. The index distributed to everyone concerned makes project manager and all related person take care of cost control, so that the whole project yield to be improved.But the engineering project has long period project life, need concentrated capital input and long capital occupied time. In practice of target cost control, the efficiency of capital is crucial to the financial performance of whole company. It is becoming the first important factor for enlarging earnings and profits to the company that if the capital can be managed and control reasonably and efficiently. Therefore, capital utility should be the main target in target cost control system. The index for capital management is practically urgently needed in the evaluation system.But in the real world, only traditional static financial indexes have been used in existing budget and target control system, which cannot indicate the status of capital utilization.