The Analysis Of Application Of Value Management Model Based On EVA In China Telecom Corp

Respond to the era of global economic integration and intense competition in theindustry, companies need a innovation in financial management, including its policies,methods and strategies. As a result, financial management and strategic theory hasbecome the focus of domestic academics and entrepreneurs in managers’ efforts to thepractice of development strategy,.Economic Value Added (EVA),which is the core value of the financialmanagement strategy. Traditional financial system had been proven to be flawed,withits strategies of investment, financing and dividend decisions cannot meet the currentstatus, and the differences between enterprise’ targets and the goal of valuemaximization, it should not be forgotten that there exists certain inefficiencies incurrent performance evaluation system and effective assessment process indicatorsalso, which can cover up the truth.By contrast,EVA has considered all the cost offunds, which represent a real evaluation of economic profit. As a value-basedmanagement, EVA can reveal the way of value creation,point out that the real key tocorporate wealth, hence taking EVA as the core of the strategic financial managementand salary management system can provide a new perspective to the development of amodern enterprise.Accordingly, the paper first introduces the EVA theory, then take a discussion inentire financial management system,consisting of performance evaluationsystem,incentive system, decision management system and risk controlling system.Finally, through the analysis of China Telecom’s case, article explores how to improveEVA financial management system and put forward relevant proposals.