Study On The Improvements Of S Company’s Comprehensive Budget Management System

Comprehensive budget management is a modern enterprise management mode, whichgenerally is at the core of company internal control system. The goal of establishing traditionalcomprehensive budget management is traditionally to be directed by sales, profits, costs, cashflow and other index, which is of great blindness, short-term and instability and will cover itsadvantage. To improving this, some scholars gradually transfer their searching subjects to EVAand consider that by introducing the EVA value management mode, the enterprise strategictarget will turns to optimize the allocation of resources, improve the efficiency of capital use,create value appreciation and realize sustainable development. However, since EVA is still anew concept to China and only stays at a theory research level, it is quite an significant subjectto be studied on how to use EVA system and to set up an enterprise comprehensive budgetmanagement system based on EVA. Based on previous research, this article attempts to applyEVA to the budget management mode of S company in order to improve its ability tomanagement value and enhance its competitiveness. Besides, this article indicates to make areference for the research of enterprise comprehensive budget management in our country andenrich the theory of comprehensive budget management.This thesis integrates both domestic and foreign research on the comprehensive budgetmanagement, EVA and the achievements of introducing EVA to comprehensive budget. Thisarticle then describes the relevant theories of comprehensive budget management system andEVA, and analyses the influence of EVA on value management, resource allocation, theprincipal-agent relationship and the improvement mechanism of residual income, etc. Besidesof theoretical analysis, this article makes a combination of an actual case of the company S tofurther illustrate the construction of a comprehensive budget management system under theguide of EVA. It should be noted that S company is a coal enterprise, which adopts atraditional profits oriented comprehensive budget management mode. By analyzing Scompany’s current budget organizational structure, content, compilation process and budgetsupervision, this article indicates problems existing in the company’s overall budgetmanagement system and emphatically pointed out that in the current budget mode, the profitsoriented management deviates from its value-making target. To solve these problems, S company should adopt the concept of EVA. First, S Company divide the budget organizationinto EVA responsibility center, then, To EVA target as a starting point for budgeting andintroduce other safeguard measures to its overall budget management system.