BSC(the Balance Scorecard) is a new strategic performance appraising system combining the financial index to the non-financial index together, which is helpful to the traditional performance appraising system.
Thirdly, after the thoroughly analysis on the problems of the present performance appraising in Xiangtan Steel & Iron Company, we, according to the requirements of BSC, redesign the performance appraising system from four aspects of financial index, client index, operation index and innovation index.
To provide substantial evidence, we selected 30 listed electric power enterprises as the sample of the financial analysis. After ascertaining the weight of each index under the financial index, we sort order the financial performance of 30 listed enterprises.
In view of the necessity of construction of 300kt/a Modified bitumen plant and its feasibility in economy, market investigation and prediction were made on bitumen demand of heavy-duty roads. Financial indexes were calculated and analysis were made on earning ability, uncertainty and risks on the basis of estimation of investment and cost, and the necessity and feasibility in economy of this project were determined.
So, through setting up and observing the changes of some sensitive financial indices, and through establishing the financial early warning system, which is to mornitor, early warn and control the financial risks and crisis, the financial hidden trouble could be prevented and removed, and the enterprise financial system and business system could be assured in a good operation condition.
As the development of the market, the shortage of the traditional, based on the financial indices methods of performance appraisal occurs, and it prevent the long and stable development of the enterprises.
BSC combines the financial indices and non-financial indices, and construct a good system of performance appraisal indices for the enterprises, offsetting the shortage of the traditional financial performance appraisal.
Compared with data that are non-seasonally adjusted, the adjusted data offer weaker evidence on the cointegration relationship between a) the sectoral output indexes, b) sectoral stock indexes, and c) individual pairs of real and financial indexes.
In particular, using historical data, we simulate the trading of straddles on the financial indexes DAX and FTSE 100 on a daily basis, based on predictions of the daily volatility differences in the underlying indexes.
There have been many criticisms for BSC using traditional financial indexes already.