Private Enterprise Financial Management Studies

1. Research purpose and significanceWe are supposed to notice that present successful private-owned Companies are just based on the thousands of frustrated and bankrupted enterprises. It is, however, surprising that these failures were primarily caused by financial factors, such as ruptures of capitals chain, blindness of investment strategy, financing difficulties and financial control problems. With increasing economical reform and market competition, many entrepreneurs are aware of the principle position of financial management in one private-owned company. On the basis of above reasons, we will analyze these failures of private-own companies from angle of financial management.2. Basic thoughtfulness and logistic structure Above all, historic backgrounds in every stage of private-owned companies shall be narrated in second part of this paper. Furthermore, on the basis of "Giant" case, we will introduce importance and significance of financial management afterwards. In the highlight part, analyzing some typical cases and ascertaining these financial problems in private-owned companies, we will discover the reasons leading them. Finally, through research and conclusion we will summarize the ways solving financing difficulties, financial strategy, investment blindness, cost management, and capitals callback problems etc. in most private-owned companies. 3. Main contents and viewpointsIn the highlight part of this paper, financial problems and ways solving them will be listed as follows:Problems1) Financing difficulties ·Time limit and structure of loan can't meet requirements of companies.·Direct financing channel block. ·Informal finance departments are still the channel which solve the financing problems. Reason·Private-owned system discrimination.·Government administration is still superior market rules from the angle of operational mechanism.·Lack of system and strategy for the policy.2) Lack of capitals raising risk controlReasons ·Without logical capitals structure. ·Unconsciousness of financial management.3) Investment strategy mistake· Neglecting main industry ·Capitals chain rupture. ·Annex trapReasons·In pursuit of short term profits. Measures solving these problems1) Formal financial management system establishing·capitals check system·Position responsibility·Basic financial management procedure 2) Solving financing problems·Guarantee constitute establishing ·Organizing risk investment fund·Private-owned credit system establishing3) Strengthening raising risk control system·Profit capability analysis·Payoff capability analysis·Capitals structure analysis·Capitals distribution analysis·Company development analysis4) Establishing investment risk control system ·Financial forecast ·Analysis and management of profits quality·Cash flow guaranteeing ·Establishing financial analysis index and long term alarm system·Taking investment risk strategy on the basis of practice 5) Capitals management and control·Interior restriction system·Financial checking periodically ·Receivables control4. Main contribution of paperIn principle of combination theory with practice, the paper primarily analyzed financial problems in private-owned companies, listing exact ways solving them. As for cases selecting, the paper is based on some representative cases of private-owned companies experiencing successes and failures. In view of intercommunity of financial problems reflected by these cases, the paper has a value of reference to private-owned companies that are struggling to or will meet financial crisis.