Research On Comprehensive Budget Management Of J Company Based On EVA

In contemporary society,due to the continuous growth of social economy,corporate internal control plays an increasingly more important status.While comprehensive budget management as a major component in corporate internal control has become a common management mode applied in most companies.Traditional comprehensive budget management focuses more on profit indicators and shows strong short-term volatility characteristics.This goes against the long-run development of companies.Corporate budget management should maximize shareholder value,and set up budget goal on this basis.In order to solve this traditional problem,researchers divert their eyes to EVA value management and realize the feasibility to introduce EVA concept to corporate comprehensive budget management.The paper firstly concludes and analyzes studies about EVA theory and comprehensive budget management theory at home and abroad,subsequently performs theoretical analysis on the integration of EVA,value management,residual income and principal-agent theory,briefly explains the necessity to introduce EVA to comprehensive budget management,and eventually takes Company J as the example to conduct the practice analysis.Throughout the basic introduction to Company J and analysis on the current situation of comprehensive budget management,the paper finds that Company J executes traditional budget management mode.Its budget objective lacks strategic vision because it simply considers target profit and working capital,but ignores capitalcost and corporate value creation ability.Moreover,budget organization is less sound,and corporate budget execution,control and assessment system is less rational.Targeted at these problems,the paper will introduce EVA theory to the budget management of Company J.It firstly determines the EVA-based budget objective,establishes EVA responsibility center in all departments and subsidiaries,then determines EVA predicted value in a scientific and reasonable way and finally compiles budget according to EVA predicted value.The final goal of budget execution,control and regulation is to determine EVA predicted value.By establishing the EVA-based comprehensive budget management system,proposing related guarantee measures and continually improving the comprehensive budget management mode of Company J,Company J can reinforce its competitiveness and value creation ability in the industry,and simultaneously afford reference to the comprehensive budget management of similar companies.