A Research On Financial Performance Improvement Of Electrical Generation Enterprise Based On Power-coal Dilemma

Since2003, there has been an essential change between supply and demand relationshipin coal market, coal demand.The supply of power-coal is not adequate to its demand and coalprice is soaring,which are increasingly extruding power enterprises’ profit space and sharplyrising their cost of power generation.The change in power-coal price lead to the increasinglyoutstanding contradiction and continuous conflicts on it,which make the production andmanagement of power generation enterprises withstand unprecedented challenges and severetests,having a system loss. As state-owned enterprises,power generation enterprises not onlyhas there own business objectives,winning profit and survival,but also has there own socialgoals,something about public welfare and continuous serving for community.But it hasseriously affected the development of the electricity enterprises because of the power-coalprice dilemma caused by coal price.In this case,power generation enterprises begin toconsider the path to walk out of predicament,and holding coal enterprises become a way thatthey choose.In the power-coal dilemma,there exists a lack of guidance of theory and empirical studyon choice of power generation enterprises’ route,most studies are"feeling stones to crossriver"Secondly,there is seldom studies and reference literature on financial performance ofpower generation enterprises based on the power-coal dilemma,not to mention theperformance prediction.Therefore it cannot provide some decisive advices to help electricalgeneration enterprises.Though the case analysis which Datang Huayin Electric Power hold thewhole shares from Eji Coal Mine in Neimenggu, the significance of this study are thequantitative research on the financial performance of the electrical generation enterprisesholding the coal enterprises,which has practical significant meaning to electrical generationenterprises on the strategy of holding coal enterprises. Secondly, the electrical generationenterprises are backbone enterprises which are related to the national people’slivelihood,closely related to people’s lives.If the current difficulties of power enterprises canbe effectively solved,and the related policy proposal can be put forward,it will be a certainhelp for the life of our people and formulating the related aspects of policy.In the previous literatures,election of evaluation index mostly based on the connotationto index or the results of previous research,which exist serous subjectivity. Due to the wideusing of financial index method in the literature, many only use financial index method infinancial performance evaluation.But the method itself has its own shortcomings.This paperwill adopt the method that combine subjective and objective to build the company’s financialperformance evaluation system,combine with the actual situation of power generationenterprises in China to select indicators, using the financial index method and EVA comprehensive evaluation method to evaluate the financial performance,which can make upthe inadequacy of financial index method.Finally，it gives some improvement suggestions toelectrical generation enterprises troubled in power-coal dilemma.Firstly, this paper analyzes the reason led to power-coal dilemma. Secondly, relevanttheories of financial performance will be explaned. And on this basis, via the example ofpower generation enterprises after their holding coal enterprises, it makes a financialperformance improvement for the enterprise in the case. Finally, through the above research,it gives some improvement suggestions to electrical generation enterprises troubled inpower-coal dilemma.