The Impact Of RMB Exchange Rates' Fluctuations On Enterprise Value

Nowadays, as the steps of the economical globalization becoming fast and fast, the development of enterprise globalization has become a major trend. China's entering WTO formed the new pattern of "domestic market internationalization". In the new pattern, the value management which takes the value maximization as the business goal shows more advantages. However, along with acceleration of our country's monetary system reform, the enterprises' value is more influenced by the RMB exchange rate, especially after exchange rate system reform in China. Many scholars and managers have agreed that RMB exchange rate is an important influence factor to enterprise value and exchange rate risk is one of the most serious risks.In this paper, we examine the relationship between RMB exchange rate movements and enterprise value. A double logarithmic function model is constructed for better value management and risk management. Resorting to the model, not only the influence on single enterprise can be explained, but also the influence on different industries. The coefficients of risk are calculated by means of real data of some representative enterprises in China. The study indicates that the short-term and medium-term enterprise value will increase, if the RMB is increase in value, especially the enterprise which has more foreign trade. The study also indicates that the influence on different industries is different, and therefore we should attach more importance to these industries, such as the textile clothing industry, the real estate industry, the financial insurance industry, etc.Thus, Chinese enterprise should base on the enterprise value management, strengthen the consciousness of exchange risk management, and attach importance to the influence of the RMB exchange rate undulation; the enterprises which foreign trade makes up a bigger part of and the special industry enterprise should establish the effective exchange risk management system, give more attention to RMB exchange rate undulation trend. Through taking this step, the enterprises are able to reduce the foreign exchange risk effectively, and enable to achieve the value maximization goal better in the complex international environment.