Advanced Financial Management" is a required course for our accounting major. It is edited by Mr. Comprehensive systematic research. The specific summary is as follows:
1. The biggest advantages and success or failure factors of enterprise groups
The biggest advantages of enterprise groups are reflected in the aggregation and integration of resources and the synergy of management and The overall competitive advantage of the group generated by this combination. As the management headquarters, the parent company must be able to fully exert its leading function and establish behavioral norms and standards for the coordinated and orderly operation of the entire group and its member companies at all levels through the formulation of the group's organizational charter, development strategy, management policies, management systems, etc. Guidelines: If any enterprise wants to join the group and obtain membership status, it must first recognize the group's organizational charter, development strategy, management policies, and management systems, obey the group's overall interest maximization goal, and accept the unified leadership of the management headquarters. Otherwise, it will not be accepted as a member company.
The success or failure factor of an enterprise group lies in whether it can establish two interactive and integrated lifelines: an industrial development line with competitive advantages and an efficient management control line. The two lines of management control are interdependent and interactive, forming the basis for ensuring the vitality and success of the enterprise group.
2. Enterprise group governance structure and financial management system
The parent company or management headquarters of an enterprise group must effectively govern its subsidiaries and other member enterprises to ensure financial strategies and financial policies The implementation must be able to maintain effective control over subsidiaries and other member companies. In a parent-subsidiary enterprise group with capital as the link, the essence of the study of control rights is the property rights structure or equity structure. In terms of equity allocation, the parent company faces a dilemma: giving full play to the capital leverage effect and ensuring effective control of its subsidiaries. There is a degree of certainty between them. At the same time, if a parent company wants to exercise effective control over its subsidiaries, a basic premise is that the parent company must be the largest shareholder of the subsidiary, including the absolute largest shareholder and the relative largest shareholder. In different situations, the identity of the largest shareholder, the stability of control rights, the degree of power checks and balances encountered, and the capital leverage effect are also different.
The financial management system is the basic system established by the enterprise management authority or the group headquarters to define the responsibilities and rights relationships in all aspects of financial management and standardize financial management behavior. It is referred to as the financial system. It includes the financial organization system, financial decision-making system, There are three main aspects of the financial control system.
3. Financial strategy of enterprise groups
The target positioning of financial strategy must rely on the strategic development structure planning of the enterprise group; the implementation strategies of financial strategies are also different at different stages of development. 1. Financial strategic positioning in the initial stage: In the initial stage of the group, the financial strength is relatively fragile. In order to better aggregate resources and give full play to the advantages of financial integration, the principle of stability should be maintained. The main characteristics of financial strategic management in the early stage are stability and integration. 2. Financial strategic positioning during the development period: a stable development-oriented financial strategy should be adopted. 3. Financial strategic positioning in the mature stage: Since the company has a relatively stable market share and relatively low operating risks, it should adopt a strategy of radical financing, solid cost control, high dividends, and cash distribution. 4. Financial strategic positioning during the adjustment period: adopt a strategy of concentration of financial resources, high debt ratio financing, and high payment ratio allocation strategy
4. Enterprise group budget control and investment policy
Budget control is not only based on It is based on market forecasts and further develops appropriate response measures in advance for the forecast results and possible risks, so that the budget itself has the characteristics of a proactive anti-risk mechanism. Through the cyclical process of budget control, enterprise groups will increasingly find that many benefits are obtained not simply from the budget preparation itself, but mainly from the problems that continue to arise in the budget implementation process and therefore have to find ways to strengthen the communication and coordination process. Got the answer.
The investment policy is the basic norm and judgment orientation standard established by the management headquarters based on the group's strategic development structure target plan for the investment and management behavior of the group as a whole and each member enterprise. It is the financial strategy and An important part of the financial policy mainly includes basic contents such as investment areas, investment methods, quality standards, and financial standards.
5. Fixed Asset Investment Policy of Enterprise Groups
In today’s economic society where technological revolution continues to advance and competition risks become increasingly fierce, can an enterprise group possess advanced, high-tech assets? Fixed assets directly means whether it occupies the commanding heights of market competition. At the same time, enterprise groups must also be clear that even for the most advanced equipment on the current market, once the investment is formed, it means that the technical performance of the equipment will always stagnate at the current level for a long time in the future. Under the impact of progress, its original technological leadership will continue to weaken over time, and even become a disadvantage. To this end, enterprise groups are required to establish the concept of crisis awareness and innovation, constantly optimize the fixed asset investment structure, update technical performance, and promote strong market competitiveness with sustained technological leadership. Therefore, paying attention to technological progress, encouraging and allocating financial resources to support member companies to accelerate the replacement of operating fixed assets such as machinery and equipment is a primary factor that enterprise groups must consider when formulating internal depreciation policies.
6. Enterprise Group Intangible Assets Investment Policy
Intangible assets mainly include trademarks, brands, technology patents, franchises, goodwill, etc. As a special kind of capital, intangible assets are mainly expressed in the form of ideas - the non-"entity" of existence. In the modern market economy and society, intangible assets such as trademarks and brands are the banner for enterprises to enter the market and the "trump card" to win the competition. In the fierce market competition, which enterprise or enterprise group owns a well-known trademark or brand means that it is in the forefront of the market. It has a competitive advantage and plays a huge role in expanding market space and increasing share.
Today's international society has entered an era of continuous innovation in knowledge and technology. Whether they can effectively safeguard their intellectual property rights and technology patents in the process of cultivation, creation and innovation has become the key for enterprise groups and their competitors to maintain and expand their competitive advantages.
7. Enterprise Group Financing Policy and Management Strategy
The financing policy is the overall plan of the management headquarters based on the group’s strategic development structure, and ensures the implementation and realization of the investment policy and its goals. The determined basic norms and orientation standards for group financing activities are an important part of the financial policy of the enterprise group.
Meeting investment needs is the guiding principle for corporate group financing management. The headquarters is required to focus on promoting the implementation of investment policies when formulating financing policies. Within the overall framework of the group's strategic development structure, and in accordance with the basic norms of investment areas, investment methods, quality standards and financial standards related to the group's core capabilities, leading industries or businesses, the group as a whole and its subsidiaries should be planned in the form of plans. Make overall planning and coordination arrangements for the financing scale, allocation structure, financing methods and time schedule in advance, so as to ensure the coordination and matching of financing and investment in terms of policy
According to the financing policy and target capital structure planning, management The headquarters must determine the total scale, source nature, term structure, time schedule, etc. of financing in the future planning period in the form of a budget, and standardize the necessary financing costs, risks and quality characteristics, and then refine the budget, Carry out specific implementation and control implementation of financing activities.
8. Enterprise Group Tax Plan and Dividend Policy
Tax payment is a prerequisite for an enterprise to obtain and maintain legal person qualifications and rights status. Taxation planning cannot focus on exploiting legal loopholes, let alone tax evasion as a means. Instead, it should start from legal awareness, introduce the leverage-oriented function of taxation into the management philosophy and operating mechanism of the enterprise group, and realize the optimization of the group's organizational structure. Reasonable planning of adjustments, financing and investment activities and the best matching of benefits, costs and risks.
The core content of dividend policy is to correctly handle the division of after-tax profits between dividend distribution and corporate retention on the basis of following the goal of maximizing shareholder wealth and corporate value. Regarding the understanding of whether dividend policy affects the market value of enterprises, it can be divided into two types: dividend-irrelevant theory and related theory. Cash dividends are dividends paid by a company in cash. When making cash dividend decisions, in addition to considering the impact of the above general factors, it must also be closely combined with the company's free cash flow status. Stock dividends are a form in which a company converts dividends into shares and distributes them to shareholders. Stock dividends are generally realized through the free gift of bonus shares, that is, the transfer of retained earnings to capital. Strictly speaking, stocks donated to shareholders through the transfer of capital from capital reserve funds do not fall within the category of dividend distribution.
The formulation of the parent company's dividend policy cannot simply be based on the standpoint of the parent company itself and its shareholders. It must also take into account the interests and expectations of member companies such as subsidiaries. The parent company and subsidiaries must be coordinated and handled. The mutual interest relationship between the company and its subsidiaries; not only that, as the management headquarters of the group, the parent company must also make unified planning for the group's overall dividend policy from a higher level, that is, the perspective of management strategy, in order to standardize each The income distribution behavior of member companies can be established within a framework that is conducive to the continuous advancement of the overall strategic goals.
Through the study of "Advanced Financial Management", I focused on how to use accounting policies and financial management strategies to organically combine financial management with the corporate group governance structure model; I understood the corporate group governance structure model ——The division of responsibilities, rights and interests among financial stakeholders, and the means to achieve mutual checks and balances.
However, the corporate group governance structure model is the foundation and guarantee for corporate wealth creation; financial management is the actions taken by financial managers to achieve financial goals under the established governance model. This is wealth creation. The source and motivation of the enterprise, the connection point between them lies in the corporate financial strategic management level.
The board of directors of an enterprise group as a whole completes the approval and monitoring functions in the group's financial strategy management, while the general manager and other senior executives focus on the proposal and implementation of financial strategies. All levels of the enterprise group's governance structure are fully integrated into the entire process of financial strategic management.
So what impact will the corporate group governance structure and financial management have on the strategic level?
It is mainly reflected in the following aspects:
① The formation and selection of enterprise group governance entities play a decisive role in the financial strategic orientation; ② The arrangement of enterprise group governance entities will affect the financial strategy The motivation of the subject; ③Financial strategies can be divided into external transaction financial strategies and inward management financial strategies in terms of their relationship with the environment. Financial strategy subjects can achieve partial adjustment of financial governance through continuous selection and implementation of external transaction financial strategies. The purpose of the structure, and the development of external transaction-oriented financial strategy depends on the financial market governance mechanism available to the enterprise, while the inward-oriented management financial strategy is the foundation and guarantee; ④ In terms of organizational structure, the corporate group governance structure as a whole constitutes the enterprise The decision-making layer of financial management, general managers and other senior executives are the link between the decision-making layer and lower-level personnel; ⑤ The systematic relationship between enterprise group governance and financial management can be summarized as: at the enterprise level, enterprise group governance as the basic framework stipulates Guidance and principles of financial management. However, at the specific operational level, the micro-level activities of financial management will have an adjustment effect on the governance of enterprise groups over time. As Chandler said: When management coordination can bring greater productivity, lower costs and higher profits than coordination of market mechanisms, modern multi-unit industrial and commercial enterprises will replace traditional small companies.
We should know that the relevant stakeholders in the corporate group governance structure are not only an economic relationship, but also this economic relationship is connected through contractual ties. To make the contract effective, when the expected consequences of the financial contract occur, When the situation arises, it is necessary to clarify who has the decision-making power. This is the problem that the corporate group governance structure must solve in terms of power allocation.
It includes two aspects:
First, the power allocation between ownership and corporate group governance structure. The governance structure of an enterprise group is arranged under the premise of established ownership. Different ownership forms lead to different power configurations in the governance structure of an enterprise group. For example, in the case of concentrated ownership, the ownership in the corporate group's governance structure determines the control rights, or the ownership and control rights are closely combined, while in the case of highly dispersed ownership, ownership and control rights are separated.
The second is the allocation of residual control rights within the enterprise. The corporate group governance structure allocates residual control rights among shareholders, directors and managers. Shareholders have the ultimate control rights, and directors and managers share residual control rights. These two aspects are actually what we usually call "owner finance" and "operator finance" issues. The core of the corporate group governance structure is to clearly divide the respective rights, responsibilities and interests of the shareholders' meeting, the board of directors, the board of supervisors and the managers. boundary area to form a power check and balance relationship among relevant stakeholders to ensure the effective operation of the financial system.
If a company only owns equity capital, the chance of managers taking on bankruptcy risks is relatively small. Even if the company's operating performance is poor, there will be no financial default, which will not put pressure on company managers. However, if debt funds are incorporated into a company's capital structure, on the one hand, it can constrain managers from using cash for investments with poor profitability or inefficient expansion. On the other hand, the pressure to repay debts causes managers to avoid liquidation. Losing power while seeking to increase capital gains rates. It is precisely because of these functions of debt funds that the protection of creditors' rights and interests has attracted much attention. Although the creditor protection systems of various countries are different, creditors with a larger share of corporate capital injection will adopt active intervention strategies to restrict the behavior of managers. .
As a prerequisite for the realization of corporate group governance structure: clearly defined financial entities and establishment of incentive and constraint compatibility mechanisms; due to the existence of information asymmetry within the company, this information asymmetry leads to the failure of managers "Opportunism" and lazy behavior harm the interests of shareholders. The main financial manifestations include: using the release of false financial information to mislead investors and creditors in financial decisions, and increasing shareholders' investment risks; using shareholders' requirements not to interfere with managers' daily financial operations decisions, managers increase their on-the-job consumption or Collusion with others to seek self-interest to the detriment of shareholders; or making wrong financial decisions due to dereliction of duty to harm the interests of the company. These behaviors will restrict the smooth implementation of the hierarchical financial decision-making mechanism. To this end, it is necessary to establish an incentive and constraint compatibility mechanism within the company to coordinate the interest relationships between various layers to achieve the financial goal of maximizing shareholder interests. ?
It can be seen that the hierarchical financial decision-making mechanism between the shareholders' meeting, the board of directors, the board of supervisors and the management constitutes the main content of the corporate group's governance structure. They each perform their own duties and check and balance each other. Among them, financial strategic decision-making power is in the shareholders' meeting and the board of directors, daily financial decision-making power and financial execution power are in the hands of managers, and financial supervision power is decentralized within the company.
Therefore, establishing a sound corporate group governance structure will help improve the efficiency of corporate financial decision-making, improve the corporate corporate group governance structure, and accelerate the construction of a modern corporate system. It provides a new way of thinking for the innovation of our country's corporate financial system. At present, the common absence of property owners in Chinese enterprises and the inseparation of investor ownership and corporate property rights are due to the failure to build a reasonable property rights structure; "adverse selection", "moral hazard" and "insider control" occur among corporate financial managers " and other phenomena are due to the failure to establish corresponding incentive and restraint mechanisms for financial managers, including major mechanisms such as remuneration incentives and restraints, control rights incentives and restraints, reputation incentives and restraints, market incentives and restraints; and internal financial decisions of enterprises are ineffective or even wrong. , because there is no corresponding hierarchical financial decision-making mechanism established, including financial strategic decision-making and financial tactical decision-making mechanisms, power allocation models such as centralized, decentralized, and combined centralized and decentralized types.
Therefore, the purpose of corporate financial system innovation is to establish an enterprise group governance structure that is efficient, dynamic, and compatible with incentives and constraints.
As a qualified financial personnel, in the daily accounting work of the enterprise, it is not enough to only master the basic accounting treatment methods for specific economic businesses. You must pass courses such as "Advanced Financial Management" Only by studying, combining theory with practice, and analyzing and applying relevant systems and policies can we do better financial work.