The Research On Sustainable Growth Of Enterprises And Financial Strategies Based On The View Of Finance

Nowadays, development is one of the principle themes in such an economic globalization time as today. Sustainable development is even more important in this theme. As the subject of Micro economy, enterprises'sustainable development is of vital importance to the whole country and even to the world's sustainable development. As people become more concerned about the sustainable development of enterprises, this paper study on sustainable growth of enterprises and financial strategies only based on the view of finance We hope to provide guidance and help for enterprises' balance of development speed and choice of financial strategy.On the basis of research and discussion, this paper firstly argues that corporate sustainable development of enterprises reflects the sustainable growth of enterprises in financial sense, which is embodied in the sustainable growth rate. According to Higgins's definition, sustainable growth means to achieve company sales' greatest growth rate without exhausting financial resources, which can be expressed by a series of assumptions, namely not to issue new shares, not to change operational efficiency, and not to alter financial policies. Then, based on Higgins's proposed sustainable growth model, this paper analyzes financial factors which impacts the sustainable development of enterprises, namely, operational efficiency and financial policy. As the efficiency improvement can not be unlimited, to change the financial policy and financial leverage is risky and limited. Therefore, the pace of development of enterprises is subjected to the constraints of sustainable growth rate. To grow too fast or too slowly is all harmful to enterprises. Sensible business should consider the constraints of financial resources, rationally plan and control the pace of development of enterprises in order to achieve the sustainable development of enterprises.After having discussed the theory of value creation and the connotation of financial strategy, this paper revealed the relationship among the sustainable development of enterprises, value creation and financial strategies. Value creation means the increase of enterprise value, which can be defined by this article as fair market value for the enterprise as a whole, can usually be measured by present value of future cash flows.It depend on the profitability of enterprises. In this article, we choose enterprises' Market Value Added (MVA) to measure Value Creation. By analysis the measurement expression, we can conclude that the controllable levers, which influence value creation, include the return rate of invested capital, growth rates and cost of capital. Financial strategy is mainly related to strategic problems of raising, using and managing fund. This paper tries to understand the meaning of financial strategy from aspects of overall importance, integrity, independence, long term, dynamic adaptability etc. On the basis of the above-mentioned theories, when we focus on the relationship of the three, our point of view is that sustainable development of enterprises, as the guideline of financial strategy's choice, constrains and inspires the choice of financial strategy. Under the ideology guide of enterprises' sustainable development and the constraints of sustainable growth rate, value creation is the goal of financial strategy's choice. value creation here still takes sustainable development as the guiding ideology, can be constrained and impelled by sustainable development, and is a kind of sustainable value creation. The relationships among the three can be concluded by one word:under the guidance of the ideology of enterprises' sustainable development, focusing on value creation objectives, we should scientifically make and implement financial strategies, finally reach value-added objectives, and achieve enterprises' sustainable development.After we have made clear the relationship of the three, we take enterprises'sustainable development as a strategic starting point, consider enterprises' value creation as financial strategic objectives, conduct a separate analysis, and make a conclusion that the factors, which influence the choice of financial strategies, consist four indicators which are return rate of invested capital, capital costs, sales growth, sustainable growth rate. According to the four indicators, we combed the construct idea of financial strategy choice fundamental model of enterprise sustainable development, which based on the value creation/rate of increment financial strategy matrix model, and elaborated it. In addition, the author thought that this fundamental model should consider the factor of risk. Based on this, this article has improved this fundamental model by considering the risk factor. At last, we established a new model based on the value creation, the rate of increment and the risk factor financial strategy preference pattern. Then, according to the model,we elaborate the different quadrant financial strategy choice separately. Then, according to the location of financial strategies matrix in four quadrants, we separately discourse financial strategies that enterprises should adopt.After systemically researching and discussing the problems of enterprises'sustainable development and financial strategy choice, this paper took Petro China Company Limited as an example, chose this company's annual fiscal data from 2007th to 2009th year. By calculating and analyzing the relating data, we identified this company's annual position from 2008th to 2009th year in financial strategy matrix model. Then, we collected related data, and sorted out annual financial strategies of 2008th and 2009th year implemented by this company. By comparison with the strategic choice in the model, we found that financial strategies of Petro China Company Limited in 2008 and 2009 is basically consistent with the financial strategy based on value creation and growth rate's financial strategy matrix model. The purpose of analyzing this case is to show the scientificalness and practicability of introducing the achievement of enterprises'sustainable development and value creation into matrix model of financial strategic choice, which will guide enterprises to make wiser financial strategy choice according to their actual situation, to continually create enterprises'value, and to promote the realization of enterprises'sustainable development.In short, enterprises should take the achievement of sustainable development as the starting point for financial strategies, and take value creation as financial strategic objectives, and make a scientific and rational financial strategy in order to improve the enterprises' ability of value creation continuously.Only can we achieve continuous value creation, enterprises' sustainable development will be finally impelled and achieved.