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To see the current situation of the domestic company from financial goals

Author: WangYiRu From: www.yourpaper.net Posted: 2009-07-20 12:07:44 Read:
Abstract: With the improvement and development of the Corporation and financial market system, the importance of the company's financial management is gradually revealed. Financial management financial management the main goal is to specific financial environment, the organization's financial activities, dealing with financial relationships to achieve goals. On larger contact the financial goals and the company's governance structure, with the changes in the structure of corporate governance, the starting point and end point of the company's financial decisions are bound to corresponding changes, that is driven by financial goals as a financial must changes accordingly.
Keywords: financial management objectives; governance structure

A gradual deepening of the process of development in the relevant disciplines of the domestic and foreign scholars awareness of this issue.
In general, the selection of the target company's financial mainly the following:
(1) The marketing maximized.
(2) to increase their market share.
(3) to maximize profits.
(4) to maximize the earnings per share.
(5) to maximize shareholder wealth.
The substance of the first two that maximize revenue. Managerial Revolution "of the modern enterprise, the Western developed countries financial goals basically locked in companies maximize shareholder wealth" and "enterprise value".

1 Western developed countries financial target selection

From the graph you can get, different countries have different views held by the owner of the company, which also caused the differences of the different national corporate finance objectives. Overall, for the following two cases:
1.1 tree holding mode
Tree shareholding of the Group companies, through capital ties between the various subsidiaries to establish contact theoretically Contact can be absolutely Holdings, can also be equity, but empirical analysis found that the absolute control of the way the company basically does not exist, so companies the actual control of corporate managers, rather than shareholders, the shareholders of the real enshrined in respect of dividend income. Obviously, for the managers, if not well-managed businesses, not only shareholders will choose to vote with their feet, the new equity investment companies can not get debt investments, thereby affecting the professional business career and the managers may also be from the end. Seen that in tree holdings mode, business decision-makers are actually business owners, financial goals must be locked in the interests of shareholders, "maximize shareholder wealth" is the inevitable choice. As for the internal control under a variety of possible drawbacks, decision-making mechanisms, social supervision system, laws and regulations by the business choose to avoid.
The 1.2 ring holdings mode
Ring shareholding of the Group companies, cross-shareholdings between the enterprise is characterized by the shareholders of the enterprise is actually due to the rights of checks and balances, even if the absolute controlling stake in the company has a "child", it is difficult to "sub" find fault with the company's operating Thus, ring holdings mode, operators control more obvious, but the business, but they need the support of the shareholders, creditors, employees, not shareholder interests, and to all stakeholders who interests for financial, financial goals Select a ring holding on, this is the "enterprise value maximization.
From the "tree holdings and" ring holdings "two modes of analysis can be seen, the Western developed countries financial target selection is directly linked with the market to improve and perfect," manager market and effective " capital markets have the possibility to "maximize shareholder wealth" and "enterprise value maximization as the goal.

Choice of corporate financial goals reality

Fiscal objectives of consistency with the Western developed countries, the company financial goals in China there has been considerable controversy, there are many different choice. And fiscal objectives of the exhibit randomness and blindness is common following options:
(1) profit maximization as the goal;
(2) choose to maximize enterprise value as a target;
(3) to select enterprises preserve and increase the value of assets as a target;
(4) the select social benefits as the target;
(5) the to select employees revenue maximization as the target;
(6) to select balance the interests of the corporate relations (shareholders, managers, employees, creditors, customers, etc.) as the target. 3 Analysis

The problem is mainly focused on the following six areas
(1) Equity overly centralized. Listed companies are mostly dominated by state-owned enterprises, while the stake of the state-owned enterprises and is very focused. A relatively low proportion of the outstanding shares in the share of the total share capital of the listed company.
(2) internal control. The company information is mainly concentrated in the hands of a few people, internal manipulation operation of the company, a large number of related party transactions.
(3) The minority shareholders, creditors' rights are not reasonable protection. The company's largest shareholder with absolute or relative control over the voting rights of minority shareholders difficult with major shareholders to compete, resulting in small and medium-sized shareholders lost effective way to oversee the largest shareholder and power. The interests of minority shareholders is difficult to get strong support in the judicial process. On corporate bankruptcy proceedings, the legitimate rights and interests of the creditors is also difficult to get real protection.
(4) The Board of Directors is difficult to play. The Board of Directors of the Company structure is not rational, and the high proportion of executive directors.
(5) The legal environment is imperfect. A series of laws and regulations of the Companies Act, the Securities Act, the Bankruptcy Act, information disclosure, accounting standards, there are many affordable reality companies operating environment requirements, laws and regulations are lagging behind. Weak legal system has in fact impede the continuous improvement of the corporate governance structure. On the other hand, failure to abide by the lax enforcement needs to be further addressed.
(6) local government's unreasonable interference. The one hand, direct government intervention in business operations is also very common in some places, the corporate decision-making is often subject to government intervention. Some of the bankrupt enterprises can not fulfill the bankruptcy proceedings. On the other hand, the state-owned bank loans are often subject to pressure from the government departments.

4 actual case

According to the survey, a more serious problem of corporate governance is occupied by the controlling shareholder of the listed company funding phenomenon abound. According to incomplete statistics, there were more than 680 listed companies in the controlling shareholder through various forms of capital occupied, funds totaling 97 billion yuan, more than 20% of the listed companies to provide security for the controlling shareholder and its related parties.
1993 the Monkey King welding AG from the Monkey King Group "peel out and reorganized as the Monkey King shares of companies listed on the Monkey King Group company became the largest shareholder of the Monkey King AG. But the reorganization of assets is really just a form of "stripping" Monkey King Group and the Monkey King shares has never been implemented in personnel, assets and financial separately in the true sense of the peel. This also bankruptcy as well as the Monkey King Monkey King Group shares later evolved into the "shell" planted seeds.
Monkey King AG since listing, business conditions in decline, a loss in 1999. Published in 2000 by the debt exchanges can be seen: since 1994, the Monkey King Group's long-term lending to borrowers up to 891 million yuan, 5.9 billion repayment amount; since April 1998, the Monkey King its subordinate enterprises to provide credit guarantees an amount of 458.624 million yuan. Suddenly declared bankrupt, there are nearly 300 million, the amount of the guarantee is to lose everything. These two amounts add up to nearly 900 million. According to the data of the interim report of the Monkey King in 2000, the Monkey King, the company's total assets of 934.08 million yuan. In other words, as the Monkey King Group's bankruptcy, the Monkey King shares the company has become a shell company, hardly what the net assets.

5 Conclusion

Fiscal objectives of enterprises engaged in financial activities are expected to achieve results, only to establish the appropriate financial goals, corporate financial management activities can be targeted. There is a great difference from the domestic and international financial goals, domestic and foreign financial goals, which also reflects the differences in the domestic and international economic environment, China's corporate governance is quite complex, its located transition economy characteristics of the decision, a stage there is a lot of speculation undesirable phenomena, but it is undeniable that the economic transition for corporate governance in China wit constantly improve and enhance the efficiency of the allocation of social resources. And in the capital markets, ideas and methods of supervision of regulatory authorities are also continuous improvement based on changes in the market.
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