Study On Transfer Price To Company

After twenty years of Chinese reform and opening, the whole economy and society have developed very much. It made the academe explode the science in much extensive field, and pay more attention to the fangle. Under this background, since the 1990's, Chinese theorists have continuously and deeply studied the transfer price to the company. The study of transfer price is not only an academic problem which is very difficult to solve, but also a valuable reference for company. It is why the transfer-price has the significance of studying.In the opinion of the large enterprise group which only deals with the inner-trade, the study of transfer price is an important part of the company financial management. How to pricing is always a focus to the senior in the company. In the pricing practice, enterprise group is very difficult to fix on a perfect transfer price considering the interest of many aspects. The complexities of company transfer price are: when transfer pricing, you must balance all kinds of factor, you must achieve all goals which maybe conflict each other; you must try to inspirit the subsidiary company with the principle of equity. A successful mechanism of transfer price can be seasoned with the company costing system, at the same time, it can overcome the inherent shortcomings of the traditional costing system. In a word, the transfer price is not a easy problem to solve.In addition, the transfer price of Multinational Corporation is another interesting problem. In this field, foreign theorists have many studies. Because of the short period of the reform and opening, Chinese theorists just started to concern this problem, and they made less research progress than their foreign comrade. In especial, Chinese economy didn't completely involve into the world economy, Chinese Multinational Corporations are still young, the studies of international transfer price are still immature. So, in this paper, it appeals the relation between the profit and the transfer price and conducts the strategy of transfer pricing. The conclusion can be regarded as the principle of transfer pricing practice. I hope this study can be an reference to Chinese Multinational Corporations.The innovations in this paper are:1.Put forward the new methods of transfer price: transfer pricing with ABC and EVA.2. Give a demonstration research on how a trade of the affiliated enterprise can affect the stability of this company profit.3. Design a mathematic model which can reveal the correct relationship between the profit and the transfer price and conduct the strategy of transfer pricing.