The Research On The Free Cash Flow,perk Consumption And EVA

Free cash flow plays a role that can not be ignored in the enterprise, it is not only related to the decision-making in the process of production and operation, but also affects the sustainable development of enterprises in the future. Frequently, when the enterprise ownes a large amount of free cash flow, the management could use it as the expendable fund of daily business activities, distribute to shareholders in the form of a dividend or for private use, such as the perk consumption and so on. All kinds of capital allocation activities could directly affect the enterprise performance. In this regard,many scholars had done a lot of studies. However, most of the previous studies only discussed the impact of free cash flow on the performance of enterprises. But the scholars still had not a clear idea about how the free cash flow influence the enterprise performance. In fact, the perk consumption is reasonable and could be regarded as a kind of recessive salary, so it can to some extent improve the management efficiency of the enterprise, and plenty of free cash flow just provides a possible for perk consumption in enterprise internal management. In that way, we should pay attention to whether the perk consumption of enterprise management could play a role in the impact of free cash flow on the enterprise performance in real life.This paper mainly adopted the method of theoretical analysis and empirical test,and chose the relevant data in Shanghai and Shenzhen A-share listed companies from2010 to 2014 in the first place, and used the economic value added to measure the enterprise performance, tested the state-owned enterprises and private enterprises from different ownerships of the enterprises in the end. Specifically, the article first reviewed the relevant research results at home and abroad. Include the related studies on the free cash flow, the related studies on the perk consumption and the related studies between the free cash flow and the perk consumption. Based on this, we also used the qualitativeanalysis to discuss the relationships between the free cash flow, the perk consumption and the enterprise performance. Then we put forward the research hypotheses and used the data to make a regression analysis. The empirical results of this paper showed that:(1)In the private enterprise, free cash flow and enterprise performance were positively correlated. The free cash flow and the perk consumption level were positively correlated.At this time the perk consumption was the intermediary variable between the free cash flow and enterprise performance, but it only played a part of the intermediary effect. At the same time, the perk consumption would have a positive impact on enterprise performance. In addition, the free cash flow, perk consumption and the cross terms of them all positive affected the enterprise performance. Combined with the conclusion that the free cash flow, the perk consumption and the enterprise performance were significantly positive correlated, it can be concluded that the perk consumption had also play a certain degree of moderating effect in the private enterprise.(2)But in the state-owned enterprise, although free cash flow and enterprise performance had a significant positive correlation, but there was no correlation between free cash flow and the perk consumption. And the study found that the perk consumption didn’t play a intermediary role in the state-owned enterprise, but it played a certain degree of moderating effect yet. Finally, combined with the theoretical analysis and empirical test results, put forward the following countermeasures and Suggestions: First, attaches great importance to the free cash flow management, optimizing free cash flow of enterprise;Second, pay attention to the intermediary role and regulating role that perk consumption plays in free cash flow and enterprise performance, give full play to the incentive effect of perk consumption; Third, formulate detailed disclosure of perk consumption, to make it is open and transparent to the public;Fourth, establish and complete the perk consumption budget, the examination and approval and reimbursement system,standardize the behavior of perk consumption of management.