Financial Support Of Enterprise Sustainable Growth

Almost all of the enterprises have a longing for growth. In practice, however, there are so many cases concern with the enterprises, which are failure because of the adoption of an inappropriate growth policy. A few years ago, sustainable growth, as a manner free of excessive or insufficient growth, had become a focal point because of the collapse of GIANT GROUP. Recently, the fact that the ability inherent in the listed enterprises to create value deteriorates rapidly because of the practice of "increase profit through investment" stirs up the discussion upon sustainable growth again. At present, the research on enterprise sustainable growth localizes on the fields such as enterprise culture, technological innovation and human resources. This paper attempts to explore the financial aspects of this topic in detail by using theoretical research method.This paper is divided into five chapters. The first chapter discusses which financial management target should be complied with in the pursuit of enterprise sustainable growth process. The second chapter discourses upon the connotation of firm value, the financial appraisal model of enterprise sustainable growth and the establishment of the related financial performance indicator system. The third chapter decomposes key financial and non-financial driving factors, through which we try to find the methods towards sustainable growth. To achieve the objective of firm sustainable growth, there are two problems to resolve: the first is how to plan the strategy to guarantee the growth to be sustainable, which will be deal with in the fourth chapter; the next is how to realize the growth of the firm, whichwill be explored in the last chapter.Followed the discussion listed above, this paper reaches the following conclusions: 1. By comparatively analysis of the four widely accepted financial management targets-profit maximization, shareholder maximization, firm value maximization as well as stakeholder value maximization, this paper holds the idea that firm value maximization should be the most appropriate one; 2. This paper deduces the Discounted Cash Flow model and Economic Profit model based on the principle of inherent value method. The need of performance measurement necessitates the development of financial performance indicator system in the pursuit of sustainable growth process. This paper concludes that an indicator system based on EVA, and assisted with MVA, balance scorecard and EVA driving factors can fulfill the required function; 3. Through Discounter Cash Flow model, this paper decomposes key financial driving factors, which are competitive advantage period, the difference between the rate of profit and weighted average cost of capital, profit growth rate and the scale of invested capital; 4. This paper concludes that the appropriate selection of financial management target, the establishment of financial appraisal model and financial performance indicator system, the decomposition of driving factors compose a complete framework to guide the enterprise in the process of striving for the sustainable growth.