To Guarantee Liquidity Cash Corporation's Demand For Property Insurance

Liquidity cash is just like blood to a corporation , plays an irreplaceable role to guarantee the normal operation of enterprises A good cash flow situation often would lead to good business operations and healthy finance, other wise an unhealthy or smooth cash flow situation often would make enterprises to suffer losses or operation difficulty and tight financial predicament. It can be said that good of the business's cash flow to enterprises is both necessary and important. Once there is a kind of demand you will find a corresponding market. Due to the importance of cash flow to enterprises, there is a new kind of insurance to guarantee business cash flow, but such insurance is not well developed. I need much more theory for guidance.In this paper, in order to consider the importance of the property insurance to companies'cash flow I establishment of a model. This model is made under the premise that there is a contract establish existed. The contract says that if the producer can not complete the promised production will be subject to punishment. At the beginning of production, producer would purchase the insurance for every period and if there is any loses, the insurance company will compensate to the producer according to the insurance contract. In addition, I consider the cases when there are other ways to get funds to cover the losses, what role the property insurance will play? Arthru Hau have found a model which divided the process of production into two periods, then, I think more periods would be more reasonable. And I get some useful propositions as well as some useful inferences.The paper is divided into 6 parts. In chapter II, I made some preparation for the model and in chapter III, I discussed the case when the supplementary funds is post loss financing. The chapter IV is the case when the supplementary funds is internal reserve. In chapter V I try to think about the situation with n periods. At last is the summary.