The Importance Of Analysis Of Introducing Cash Flow Index System By SMEs In China

Since the reform and opening up， China’s small and medium-sized enterprises plays a hugerole in promoting the rapid growth of China’s economy， providing services， and solving theemployment problem， so the status and role of small and medium-sized enterprises areincreasingly understood and stresses， which has become an essential part in China’s socialdevelopment. Since China joined the WTO， China’s small and medium-sized enterprises havebeen experienced an unprecedented development， but also faces serious tests and challenges.This paper first introduces the general situation of China’s small and medium-sizedenterprises， reviews the traditional financial index system， takes Shanghai Dyao Company asexample， and analyzes the defects and impacts of the existing financial index system so as tointroduce the cash flow index system. Afterwards， this paper makes comparison with thetraditional financial index system， and draws the following conclusions (1) the cash flow indexsystem can precisely reflect the true financial position.(2) for the managers， attention should bepaid to raising the level of financial management， the corporate operating conditions can not beone-sided evaluated by assets and profits. Relative to the small and medium-sized enterprises，more attention should be paid to monitoring the cash flow situation (3) for the investors， on thebasis of concerning about the financial assessment， importance shall be attached to exploring thefinancial management model of the target company as well as the daily business model， thereflect information of the financial statements shall be associated with the actual operatingconditions to gain more accurate information.This paper aims to inspire the managers of China’s small and medium-sized enterprises，effectively combines with the actual situation of small and medium-sized enterprises， focuses onthe company’s cash flow situation， makes efforts to improve the financial management of smalland medium-sized enterprises， so that promote the enterprises to walk on the p of sustainabledevelopment.