Selection And Application Of Centralized Capital Management Model In The Sh

Capital management is very important for any enterprise. Nowadays, all of the enterprises, big-sized or small-sized, profit or non-profit, public or private, are aware of a necessary emphasis on capital management. Equally, capital management is pressing and crucial.SH is a listing company with a proud history. However, internal management was weak, investment was heavy and capital management was disordered in the past. In 2004, SH Company is facing duple restrictions from the market and bank, which result in the problem of repayment of bank loan, difficulty in raising money and shortage of working capital. The existing dispersed model of capital management cannot fit in with the requirements of the Company. In other words, SH Company shall establish a concentrated model of capital management in order to allocate group resources in a timely manner and resist unexpected risks. The application of concentrated model will be helpful for SH Company to break away from the current dilemma.The selection of settlement center model as SH Company's application of capital management is based on comparison of characteristics and applicability of different concentrated models of capital management, from perspectives of applicable scope, demand on establishment, approval efficiency and effect of establishment. And then, SH Company chooses the semi-dispersed scheme amongst various application plans. SH Company aims to change the current status through the application of such scheme.Finally, The Article holds an opinion that application of the model of semi-settlement center could help the company increase working capital, deduce financial expenses, low asset to liability ratio, improve the management and profitability as a whole, and reinforce the capability of withstanding external risks.