The Efficiency Of The Corporate Finance Analysis

Enterprise financing, or Corporation financing, is an economical activity, in which enterprise raises money for its operation by a particular channel and method according to its future strategy of operation and development as well as based on the current status of its own management and the situation of the operation of fund. The nature of enterprise financing issue is the transference from deposit to investment. In recent years, a series of issues popularly concerned in our economy have been directly or indirectly associated with enterprise financing. This is a reflection of the impact of enterprise financing on a country's economy, namely the issue of efficiency of enterprise financing. The objective of this dissertation is to create a framework system, which can be used to thoroughly analyze the impact and influence of enterprise financing on the economy in various aspects. This is called the system of "Efficiency of enterprise financing" by which some issues can be organically bound with each other, such as the cost and risk of collecting fund in a firm, corporate governance, the profit and risk of fund provider, the asset quality of the financial institute, the macroeconomic effect of the operation of fund, the safety of national economy, and so on. And then my research will use such a system to analyze a number of issues related to enterprise financing in our country, and try to come up with solutions. I expect that such a research will not only give some consults for the government to make enterprise reforming and financial policies, but also provide the criteria and helps for corporations to choose efficient financing model, and the financial institutes to select and evaluate loan and investment project or administrate credit businesses.The efficiency of enterprise financing is an ability and effect which is showed off by a certain method or system of enterprise financing in the process transforming from deposit to investment. It can be analyzed from both microcosmic and macroscopic ways. The micro-efficiency of enterprise financing analyze the impact and influence of a certain method or system of enterprise financing in the view of the main body of micro-economies, consisting mainly of the efficiency of the corporate fund-collecting, the efficiency of the corporate governance and the efficiency of the corporate fund-providing. The macroscopic efficiency of enterprise financing refers to the impact and influences which enterprise financing activities act on the whole national economy. It's the external efficiency of the activity of enterprise financing. It can be analyzed in detail from the fund-distribution, the impact of the fund and the economical safety. This thesis will give special emphasis on the microcosmic analysis of enterprise financing.The efficiency of the corporate fund-collecting is a capacity that an enterprise feeds capital into its operation by a certain financing method at the lowest risk but for the highest cost-earnings ratio. It surveys, mainly in the view of the fund-collecting enterprises, the relevant cost, income and risk incurred in the fund-collecting process. As far as fund-collecting enterprises are concerned, any kind of the financing method has its cost and risk, different financing methods embody different costs and risks. Credit financing is a "double-blade sword" to the stockholders' benefit. Theincreasing of liability ratio could accordingly stimulate the increase of the profit rate of the equity capital, but on the other side, the risk would also accordingly increase. Although optimum capital structure really exists, lots of researches have shown that the capital structure is closely related to many factors, such as the technique-economy characteristics of the industry the enterprise belongs to, the distribution of cash flow in operation determined by profitability and the life-cycle period, business credit and financing ability, managing concept and behavioral characteristics of managers and the extent of macro-circumstance's influence on the enterpris...