Research On Financial Strategy Management Based On Firm Value

Financial Strategy Management (FSM) is increasingly becoming an important research field of Financial Management. As increasingly fierce competition in the worldwide, it is hard for a company to own all-around financial resource advantages. To be ineffective in financing, investing and distributing resources will lead to the wasting of resources and go against establishing the aim of building competitive advantages. Through developing financial strategy effectively and implementing them efficiently, a company can build up the competency and the competitive advantage, therefore managers and researchers are all facing an acute problem on how to further consummate the theory, tool and framework of Financial Strategy Management. The paper firstly analyzes systemically and thoroughly the relationship between firm value and financial strategy management. Though the normative research way, the paper defines the conception of Firm Value and Financial Strategy Management, and puts forward that the aim of FSM is pursuing long-term profit competency, the essence of FSM is building up competitive advantages, and the attention of FSM is analyzing strategic factors. On this basis, the paper analyzes that firm value is the most precise measure in evaluating the long-term profit ability; and firm value is the basis of the competitive advantage while it is the subject basis on evaluating the competitive advantage; the strategic factors can mainly effect the creating of firm value, in sum, the paper conducts the normative research on the relationship between Firm Value and the above-mentioned three key aspects. It supplies the strong theoretic basis for developing the research on Financial Strategy Management based on Firm Value.Secondly choosing the data of the 81 listed companies during five years as samples, choosing the Tobin's Q delegating firm value, and choosing Total debt to total assets etc, Dividend growth etc, and Current investment etc as substitute of the investment strategy, financing strategy and distributing strategy, the paper conducts the demonstration research on the relationship between Firm Value and Financial Strategy Management thorough pertinence analyzing way. The results of the above research reveals the all indexes having strong pertinence with Tobin's Q except for Total debt to total assets or Dividend growth, it verified the conclusion of theory research through the results of demonstration research, It supplies the trenchant support on developing the research on Financial Strategy Management based on Firm Value.Based on them, the paper proposes and validates the model of developing the Financial Strategy based on Firm Value. On the basis of theories of the valuation and firm life cycle, the aim of the model is the max. of firm value, choosing firm life cycle as the qualitative variable, and choosing EVA&CVA as the quantitative variables. The model effectively utilized the precondition of the valuations' function expanding, and choosing the complementary EVA&CVA as the key quantitative variables, so that it can resolve the profit-oriented problem during developing financial strategy. Introjected the firm life cycle as the qualitative variable, while discussing the firm life cycle effects on EVA&CVA, so that it can conform firm environment and firm value changes as developing financial strategy; Binging forward the four modes: Value Intension Centralize, Value Extension Expand, Value Multi-Equilibrium and Value Constriction & Diversion, it become more conformity when developing financial strategy. And then the paper conducts the case studies based on eight listed companies'...