How Financial Management Enhances Corporate Value

Managers should recognize and master the mystery of financial management to enhance the value of the enterprise. The relationship between financial management and human resource management There are many concepts in the relationship between human resources and finance, such as incentives, training, psychological guidance and so on, all of which are designed to stimulate the motivation of personnel. The basic question to be clarified when making compensation incentives is: how many resources the enterprise gives to the employees, how many resources the employees have created, and how the enterprise should give rewards. Chinese enterprises are more incentives to reward, and there are a lot of visionary incentives, in fact, these incentives are far less effective than pay incentives to solve the problem of the actual interests of employees is more important. Human resource management should make great efforts in this aspect of incentives. From the human resources survey, in the United States, the financial director of the enterprise evaluation and constraints, Chinese enterprises are divided into human resources management, which is not impossible, the key is the design of human resources must understand the capital budget, the amount of resources to understand how to incentivize and constraints on the mechanism, these are also the scope of the financial research, which can be seen in the relationship between the two. The basic feature of the market economy is competition, the result of competition is that profits are constantly diluted, the enterprise only has enough profit margins, enough cash to speak in the market, from this point of view, financial management will certainly enhance the value of the enterprise. From the viewpoint of the nature of modern enterprise, the enterprise itself is to solve the principal-agent, through the shareholders' meeting and a series of procedures to complete. This principal-agent relationship will be contradictory as long as it exists: shareholders seek to maximize shareholder value, and operators seek to maximize operator value. If this contradiction is not resolved, corporate corruption will arise. After the shareholders put money into the enterprise, it becomes a person who doesn't know the situation of the enterprise, while the operator is very familiar with the situation of the enterprise, the enterprise earns money is the shareholders, the loss of capital is also the shareholders, the operator to bear the loss is very small, the shareholders become disadvantaged. State-owned enterprises can not run well is not a property rights issue, the core problem is the lack of incentives and constraints. When the ownership and operation rights are combined into one, it is a very good incentive and constraint mechanism. But the enterprise is a little bit bigger, will produce the separation of ownership and operation. The problems of state-owned enterprises are not only unique to state-owned enterprises, private enterprises and foreign-funded enterprises also exist, as long as there is a separation of ownership and management rights will inevitably produce this contradiction, which is also called the big business disease, which requires the design of an incentive and constraint mechanism to increase the cost of certain behaviors. Many enterprises lack incentives and constraints, which violates the most basic principles of management. As for how to establish incentives and constraints, the logic and completion of the model is very simple, clear how many resources given by the enterprise, the output of the resource is how big, you can determine how to give incentives. The completion of this process are the responsibility of financial management, the pursuit of enterprise and enterprise value are financial cooperation to complete. Enterprise pursuit of value maximization, financial management is the pursuit of financial maximization; when the enterprise pursuit of stakeholder value maximization, the same financial to pursue stakeholder value maximization. Enterprises is to make money, and control analysis of the so-called sustainable development, manifested in constant money. What is the relationship between financial management and market strategy and market policy? I use my own personal experience to illustrate. China Resources to Anhui merger and acquisition of Anhui Beer, the latter accounted for 60% of the market share of Hefei, China Resources is only 20%, Anhui Beer's senior management proposed rather than let the profits do not let the market. As a consultant to CR, I conveyed to them the concept that there are only strong players in the market, not latecomers. Another case is that we announced two days ago by the China Enterprise Confederation evaluation of the management consulting boutique case, the company a simple institutional design behavior, got 50 million tax rebates. To sum up, the financial enhancement of enterprise value is mainly reflected in three major aspects A, create enterprise value activities, including tax planning, centralized management (especially funds), surplus management, financing management, investment and mergers and acquisitions, cost control, etc.; Second, support enterprise value activities, including comprehensive budget management, financial process re-engineering, working capital management, profit management, performance management, salary management, risk management, etc.; Third, to maintain enterprise value activities. ; iii. Activities to maintain enterprise value, including financial management system construction, accounting management, accounting information management, accounting system and organizational management, etc. Carrying out financial management to enhance enterprise value activities Although finance cannot replace production and operation, it can enhance enterprise value. This requires a clear position of financial management, the establishment of "financial management (non-financial departments)" as the core of the enterprise management model. We also need to accelerate the transformation of financial management, promote financial management from accounting and revenue management to risk control type change, to be able to analyze the internal and external risks of the enterprise, the development of risk control plans, dominate the production and operation activities, the implementation of the value chain management, to support the leadership decision-making. Enterprises to pursue stakeholders to maximize returns, we must meet the interests of creditors, contributors, operating executives and operating staff, to meet the interests of customers and suppliers ...... balancing the conflict of interests from two aspects: first, based on the law; second, the balanced arrangement of its own interests. From this point of view to understand the financial management to enhance enterprise value of the behavior, come to this conclusion: financial management to create enterprise value, the centralized management of funds, operations management, financing management, cost acquisition is to create enterprise value, these activities related to financial activities add up to enhance the enterprise financial management activities. Carry out financial management to enhance enterprise value activities should include the following: cost management, tax planning, comprehensive budget management, performance payroll management, financing, investment, profit management, *** enjoy services, centralized management, financial process re-engineering, financial strategic management, enterprise risk management ...... value creation activities can also be applied to the wooden bucket Theory, the height of the barrel board determines the height of the value of the creation, the shortest board determines the value of your; keep the enterprise value of the activities, like the bottom of the bucket, without it there is no way to succeed, the enterprise was established first need to do the basic guarantee of the operation of the financial. Activities to support the value of the enterprise is equivalent to a hoop on the barrel, with the hoop water will not be lost, and increase its security, which is the financial management to enhance the value of the enterprise. Provide personalized financial management training In the financial management training industry, the important issue is how to participate in the management of finance, so that finance in the financial management process to create enterprise value. I have such a few understandings: First, do not move to do statutory accounting training, the enterprise is concerned about management accounting training, financial management to enhance the value of training, from the economic point of view, from the management point of view to address the role of finance in the process of enterprise management training. Second, one-on-one training is more effective. Each enterprise has its own characteristics, should do personalized training for the enterprise. Third, advocate the hands-on coaching training. Management methods are not good or bad, and the combination of the specific situation is a good method, we should learn from others, and China's environment, stage of development, culture, close integration, there is no scientific management, only effective management, so that we can realize the financial management to enhance the value of the enterprise.