The Shortcomings and Improvement of TraditionalManagement Lever Theory

Traditional management lever theory is not very efficient in its forecasting and risk measurement functions. It also has some shortcomings in evaluating business performance. Based on the analysis of the traditional management lever theory and combined with business operation and conditions of market economy, this paper introduces three factors such as the ratio of business assets and liabilities, self-owned funds and tax rate, and defines the generalized meaning of management lever with mathematics methodology. It clarifies the basic composition of management lever and improves the function of management lever theory.