Dynamic Investment Strategy Based On Free Cash Flow Management Research

Under the environment of fiercer market competition, enterprise's strategic management receives the widespread attention. Financial strategy is a key part of the business strategy theories. It has very important meanings for a company to make the competition advantage and arrange rationally limited financial resources by examining market and finance environment that enterprises are in closely to financial resources rationally limited in arrangement of enterprise in terms of strategy. This thesis thinks under the variable environment, it is not possible to make financial strategy once and for all. Financial strategy should be changed according to the change of the environment for an adjustment.With our country market economy and stock market development and enterprise operating mechanism transformation, the quantity needed of cash flow are daily on the increase for the users of financial information. What's more, cash flow has been a crucial factor in the existence and development of enterprises. Because profit targets can't be compared with cash targets in financial decision and evaluation the performance of the company, people attach more and more importance to Cash Flow, and raise the view of "cash is king". Cash Flow becomes gradually an essential decision variable on enterprise investment, financing, dividend policy managements. Especially, initiation of free cash flow makes a full allowance for the cash demands on the sustained growth of business and investment. Free cash flow has been a decision and feedback factor.This thesis integrates the concept of free cash flow into the investment strategic management, which helps managers to manage investment strategy under the dynamic environment. And then, this thesis merely touches on the dynamic management in investment strategic, which carries on deep discussion on optimization of the structure of the assets. The thesis falls into five sections. The objective, significance, theory foundation and framework of this thesis are discussed in chapter 1. In chapter 2, the theory of investment strategy and dynamic optimization is described. Based on the elementary theory of investment strategy, the question referred to financial dynamic and scientific management that bases on the analysis in value, and uses the tool of free cash flow with changeful environmental. Chapter 3 discusses the environment of investment strategy and makes interrelated dynamic analysis by strategy modeling. This thesis specifies the dynamic optimization on investment strategy by free cash flow in chapter 4. According to financial environment of the enterprise, consequently, the process of reaching the optimal assets structure includes both short-term adjustment and long-term one. Finally, this thesis discusses achievement of sustainable growth, which represents the aim of the sustainable growth on investment strategy connection with the free cash flow.Due to the essentiality of environment analysis, this thesis discusses the environment of investment strategy and makes interrelated optimization analysis, and explains a process of dynamic investment strategy optimization using free cash flow as decision variables. The investment strategy of an enterpriser is a process of reaching the optimization asset structure and realization of sustainable development on limited resources.