Evaluation Research On The Ability Of Enterprise Development Based On Cash Flow

The ability of enterprise development is a kind of development potential which accumulates unceasingly from its own production and operation activities. Specifically speaking, development potential shows that operation results of the enterprise are enhanced continuously, as well as the actuation which enhances the operation results is constantly improving. The development ability is of great significance to the enterprises. Development is the foundation of survival to enterprises, the enterprises are able to improve the survival quality on the premise. Only for development, the enterprises can adapt to the ever-changing environment, in order to achieve dynamic survival. But considering the present situation of our country, we do not attach great importance to the analysis and evaluation of the ability of enterprise development. Traditional financial analysis often only analyzes enterprise's profit ability, transporting business ability and credit ability from the static angle, and is a kind of stable analysis, but regarding the development ability, traditional financial analysis stops after getting a smattering. In addition, a little of analysis of development ability is mainly based on several targets, for example, the ability of capital asset growth, sales growth and income growth, exactly speaking, which make the appraisal of the past development condition of the enterprise.As a fact, the appraisal is not great significant to the forecast of the future development of the enterprises. Therefore, in order to overcome these deficiencies, we need also to grasp the development process and trends of the enterprises from the dynamic angle, we should fully tap the potential for the development of enterprises.So based on the exploration of inherent inner link between cash flow and development ability, we put forward a new idea about the evaluation of development ability. We introduce a sensitive factor --cash flow in research on the ability of enterprise development, and make it become major effect factor in analysis and appraisal of development ability.First, this article combinating the related knowledge of financial analytsis, discusses the related theories of cash flow, development ability and the necessity and feasibility of the analysis and evaluation of development ability through cash flow. Secondly, this article deeply analyzes the primary factors which affects and actuates the enterprise development ability, and constructs the first-level evaluating indicator system of enterprise development ability. Following this, the article fill the strongly related cash flow indicators in each sub-ability as their support, thus build up the synthetic evaluation indicator system of enterprise development ability. Third, acting the synthetic evaluation indicator system of enterprise development ability as basic framework, this article discuss how to utilize "layer started grade" synthetic evaluation method to computate synthetic evaluation target value of the enterprise develop ability. Finally, based on the related financial information in recent years of four listed high-tech company, this article carry on the empirical analysis and comparison analysis of their develop ability, and obtain the convincing conclusion.In short, On the one hand, this article breaks through the limitation of analyzing the enterprise development ability with the static target in the field of financial analysis, and utilizes many dynamic cash flow targets to construct more scientific and complete synthetic evaluation indicator system of enterprise development ability. On the other hand, this article makes up the flaw that targets are too jumbled, but the evaluation results are not accuracy and objective when we carry on enterprise development ability appraisal. This article takes cash flow as a breakthrough to directly reflect and evaluate enterprise development ability, and considering fully layered characteristic of indicator system we build up, this article chooses suitable synthetic evaluation method, which is not only the innovation in evaluation theory of development ability, but also the innovation in evaluation method of development ability. Its practical significance lies in the fact that, after China's accession to the WTO the degree of open to outside world is enlarging, the development opportunities further expand. This article emphasizes the importance of development ability to the enterprise, and puts forward a scientific, objective and feasible evaluation methods of development ability, which can guide the enterprise's behavior correctly, avoid the nearsighted sickness in the production and operation process, increase the enterprise's foresight and sagacity, so that Chinese enterprises are able to march into the health and sustainable development track.