Research On Financing Decision-making Of China's Enterprises

Business is a profit-making organization,its starting point and end point is profit. Enterprises once established,will be faced with competition,and always in a state of contradictions that are about collapse and the survival,development,and atrophy .The management of the business objectives can be summed up in the survival,development and profitability. In order to achieve their management objectives,enterprises need enough funds to support business growth. All the activities of enterprises can not achieve without enough funds. This relates to the financing of the enterprises. The financing has many different ways. Each way has different financial risk and cost. How to determine a reasonable capital structure to maximize corporate value is an important aspect of modern finance theory. Now the capital market is expanding by leaps and bounds, which provides much more financing way for China's enterprises and makes the firm financing at lower cost and higher speed. But at the same time we must notice the problems and influencing factors of China's enterprises. And one of the most important is that due to the imperfect business value measurement methods the enterprises have no choice to get the optimal method of financing and no way to reduce the financing cost for the maximization of corporate value.This theory is composed of 7 chapters. It follows the logical way of introducing problem, analyzing problem and solving problem. Chapter 1 is the foreword, it describes background of the research, significance of the research and development of the research. Chapter 2 is the basic theory of financing, it answers what financing is, introduces financing ways, financing essence and financing construction. Chapter 3 is the study on financing situation of China's enterprises, it sums up financing order by calculating financing cost of different financing ways, then finds out the financing problems of China's enterprises are unreasonable financing construction, specifically are unreasonable debt structure and financing order. Chapter 4 is influencing factors, it points out that financing problems of China's enterprises is caused by unreasonable financing construction, ineffective regulating of creditor and stock rights and lacking of financial instruments. To solve financing problems and strengthen the financing decision-making capacity of China's enterprises, lower financing costs, improve corporate value, finally optimize the allocation of social resources, improve the capital market, China's enterprises must adopt scientific methods of evaluation to analyze corporate value. So in this way, Chapter 5 connects financing with corporate value, compares different methods of evaluating corporate value, explains the advantage of EVA. On the basis of previous chapters, chapter 6 suggests EVA as a measure of financing condition of China's enterprises, builds up EVA-based financing decision-making and points out the objectives and advantage of it. Chapter 7 finally gives advice on the external financing environment for making correct financing decision-making, including the optimization of financing construction, the adjustment of bank-enterprise relations and the regulation of the capital market system.