A Study On Cash Flow Management Of Rapidly Growing Enterprises

Since economic reform, Chinese economy has flourished and thousands of new enterprises spring up, but most of whom go into bankruptcy after a short time rapid growth. The average life of Chinese small and medium-sized enterprises is only2.5years, which of group companies is also7to8years only. There are so many market opportunities and huge potential market in China, which can help most companies develop well, while most of them are still stuck in stagnation and even bankruptcy during their development, the reason is that the capital catenaries appear rupture, flowing cash is deficient."Cash is the King", and the net cash flows from operating activities is "the King of Kings", the cash in a company seems the blood in people’s body. If there is a lack of cash in a company for a long time, the company will be hard to develop well and continually, even will be bankrupt. With the enlargement of investments, diversified development, most enterprises grow rapidly but at the same time are always beset by insufficient cash flow. Although the enterprises well know the importance of cash, there are still many problems of their cash flow management.Linking the general theory with an actual case, we state the problems of cash flow management in rapidly growing enterprises, which arise frequently but are neglected easily, and put forward the improvement suggestions. Firstly, we explain the related definition of cash flow and cash flow management; introduce the importance of cash flow management in business administration. Then, we analyze the possible problems of cash flow management in rapidly growing enterprises. Because of not understanding the importance of cash flow management, and inadequacy in managing methods, the management of cash flow in most companies is not effective. Concentrating on these problems, we bring forward some tactics. Finally, we take company A as the sample. We introduce the industry information of importing wine and history of company A, analyze the financial situation and the issues of cash flow management. Accordingly, we devise the improvement suggestions concerned.Through the analysis of company A, we know clearly that although the situation of sales and profit is good, the cash flowing may be bad. There are many management problems in company A, especially in operating activities, which may have tremendous consequences for the future development of company A. Only to improve the situation of cash flow, company A can keep vanguard in this industry and become stronger and bigger.