| Growth, in the pursuit of the goals of an enterprise, is the reflection of the essential spirit of the entrepreneur. Growth can bring more opportunities, better income, less risk and greater business value to the firm. In order to get high growth rate, firms always neglect that growth should be matched with the resources, especially the financial resources of the firm. The excessive growth will probably lead to serious shortage of financial resources and financial crisis, even bankruptcy and the fate of closure. Professor Robert·C·Higgins, the Senior Financial Jucist of America, warned that, from a financial point of view, the growth is not always a gift of God. Unless the firm's management group are aware fo the results and take positive, effective measures to control, high growth rate will make firms very lack of resources. Otherwise the rapid growth is probably lead to insolvency .Therefore, the problem that exploring the growth of the firm, coordinating and matching the growth with financial resources of business, avoiding financial crisis in the growth, to ensure that they are able to achieve sustainable growth, is a extensive important issue which we should solve right now.On the issue of business growth, Tdith Penrose elaborated and researched in his book in early 1959. After that, scholars at home and abroad worked on a wide range of his study. But looking at the research literatures, extensive researches were focus on corporate culture, technological innovation, organizational structure, human resources and so on, while less using financial point of view to do the researches. It is mainly because nonfinancial factors take a considerable proportion of those determining factors which affecting the sustainable development of business. But in fact the failure of business growth always due to the blind pursuit of high-speed business growth, overestimating growth abilities which the financial resources can not support, etc.As most domestic and foreign studies focused on the non-financial factors, or singly do some researches on how to choose the financial goal of the sustainable growth and the evaluation of the sustainable growth model. Almost no research was based on the angle of finance, this article will focus on the financial factors, and do some researches on the sustainable growth of a firm, the balance between the growth and the firm's resources, and how to avoid the financial crises while a firm keeping developing.This study consists of six parts:Part 1: The research on the firm's financial objectives which basing on sustainable growth theory and sustainable growth factors.This part mainly analyzes the enterprises'objective and the financial managerial objective which basing on the sustainable growth theory, after reviewing and analyzing the current most representative financial objectives--maximizing profits, maximizing the interests of stakeholders, maximizing the wealth of shareholder, maximizing the value of enterprises, this article compares these financial objectives and finally confirms that choosing maximizing the value of enterprises to be the financial objective is reasonable. As the sustainable growth of business is impacted by so many factors, which include not only financial factors, but also lots of non-financial factors, this part analyzes the above two mainly aspects. Financial factors includes profitability, ability to invest, financing capacity, dividend policy and so on. Non-financial factors includes macroeconomic environment, impact of industry choice, innovation capability, and the life cycle of the firm.Part 2: Financial managerial tools for sustainable growth----- sustainable growth modelThis part, on the basis of analyzing the two most influential and representative Higgins model and Van Horn model, sorbs the two model's merits, and gets rid of their weakness, and then rebuilds the sustainable growth model of enterprises a through analyzing the financial factors, meanwhile analyzes: 1. how fiercely the growth rate will be changed while firm's asset turnover rate, equity multiplier, return on sales, retained earnings ratio changed. 2. the relationship between sustainable growth rate and the stock issues. 3. the relationship between the changes of various factors and firm's development. Part 3: The research basing on how to estimate the fund shortage rate and determine the best growth rate of the firmThis paper first focuses on the method to judge the fund shortage rate, and then finds out how to determine the best growth rate. At first, the article focuses on the method of judging fund shortage rate basing on the impact of the shortage of the cash, then analyses the best growth rate. The article mainly focuses on the importance of the method to judge whether a firm lacking of cash or not, at the same time, in order to find the best growth rate, the article firstly do some research on the different industrial background, then does the research according to the actual growth speed of business, the differences between the best internal and external growth speed in order to find the best growth speed at different conditions.Part 4: The capital structure research basing on the sustained growth theoryThis part firstly analyzes the definition of capital structure, and concludes the various existing capital structure theory. Then, focuses on the defects of the traditional capital structure which ignoring the growth of a firm, after that, the article reconstructs the optimal capital structure theory basing on the sustained growth theory.Part 5: The dividend policies research basing on the sustainable growth theoryThis part firstly reviews the theories of the relevance between dividend policies and firm's value, meanwhile, analyzes the affection factors of the dividend polices, after that, the paper concludes the advantages and weaknesses of existing dividend policies. The article finally analyzes the relationship among dividend policies, the sustained growth of a firm and firm's value, and gets the conclusion that the optimal dividend policy should be balance with the firm's existing dividend and future development; firm should choose different dividend policies according to various environment.Part 6: The investment decision-making research basing on the sustainable growth theoryThis part firstly analyzes the importance of the investment decision-making methods to firm's sustainable growth, then reviews the existing investment decision-making theories, and finds the weaknesses of the traditional investment decision-making theories. After that, the article finds out the investment decision-making principle and methods which could satisfy firm's sustainable growth.This article has four mainly innovation points:1.Rebuilds the sustainable growth model and expands its function. We know that it's very difficult to find a appropriate growth rate which at one hand can satisfy the market competitions and meanwhile be coordinate with firm's various resources'supplement, so, if this problem can be solved, the sustainable growth theory will be a important decision-making method. This article firstly analyzes the Higgins model and the Van Horne model, then ignores all the assumptions in the Higgins model, and then reconstructs a sustainable growth model which could be adapt to various conditions, meanwhile, the paper analyzes the relevant factors which will have influence on firm's sustainable growth, such as: asset turnover, equity multiplier retained earnings rate, etc, and the relationship between the changes of the sustainable growth rate and the stock issue rate, the above researches provide a scientific basis for firm's decision-making process.2.This article gives a new method to judge whether the firm lacking of the cash. For the judgment of the cash lacking rate is a very important process to the firm's development, but the traditional cash lacking judging method has a defect—the traditional method only compares the firm's real sustainable growth rate with the sustainable growth calculated by Higgins model to judging whether a firm lacking cash or not. Indeed, a firm should establish a sustainable growth model which should be based on firm's real operation efficiency and stable financial policies to judging firm's cash lacking rate. This article establishes a new sustainable gorwth model which basing on on firm's real operation efficiency and stable financial policies, and can help firms to evaluate the cash lacking ratio.3.Working on finding a best capital structure, and relocating the firm's best captial structure. The capital structure is a core item to firm's finacial decision-making process. For the traditional capital structure theories are basing on the assumption that firm will not develop, so, all the existing theories gets the same conclusion that the best capital structure can be get when the weighted average cost of capital(WACC) gei its lowwest point, but in fact, development is every firm's goal, so, this article's research on capital structure is basing on sustainable growth theory, and through research, it finds that the best capital strucure will not get when WACC gets its lowwest point, and a firm has different best capital structures when facing various real growth rates.4.Establishing a dividend policy basing on suatainable growth model, and analyzing the relationship maong dividend payout ratio, sustainable growth rate and firm's value, then getting the conclusion that the best dividend policy should be adapt to firm's existing dividend mount and future growth in toder to maximize firm's value. Finally, according to the fact that a firm has different growth rate in different period, the aritcle figures out the best dividend policies while firm in various developing stages.
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