Research On Financing Strategy On The Basis Of Cash Flow Management With The Example Of Company B

Cash is the foundation and guarantee for enterprise’s development and management; and cash is also significant for promoting national economic development. As the most active and important part, cash is the source and cornerstone for enterprise’s survival and growth, especially for the company’s strategy choice. In current market economy system, the statement of cash flow is used to reflect real, comprehensive and objective financial situation. Enterprise decision makers usually depend on accurate, scientific and rational analysis of cash flow to objectively evaluate the financial situation of enterprises and make the correct strategic decision. Scientific analysis of the information in the cash flow statement could also help to better improve the enterprise management level, the management ability, and promote the better and further development of enterprises.Real estate, compared with other industries, has the characteristics of typical large investment, high risk and long recovery cycle. Plenty of money supply is the safeguard for conducting projects, enterprise management and expanding scale of the real estate industry. Real estate industry is one of the most important parts of China’s economy and has played an important role in national economy and fiscal revenue. Since it is mentioned in the Third Plenary Session(of the 11 th Central Committee of the Chinese Communist Party), the national policy guiding in this field has been continuously adjusted with the development of the real estate industry and the change of macro environment. Over the past few years, Chinese government constantly enacted policies to restrain increasing housing prices, which indicates the strong determination of our government to enact its power from the perspective of macro-economic control. Recently, the levy of property tax has promoted much discussion, which put the real estate industry into a worse situation. Under this background, there are countless deficit real estate enterprises, and only a few could enjoy a long-term healthy development. This phenomenon is related to the adjustment of national policy, but also highly connected with the choice of enterprise’s financial strategy, financing channels and cash management. At this point, it is particularly important to study the financial strategy of the real estate industry, which is based on the cash flow management of this capital intensive industry.This paper, based on the research of cash flow management influence on enterprise financial strategy, adopts the method of literature review and case study to conduct the study. It firstly explains the concept of enterprise financial strategy, cash flow and financial strategy and lists the key indicators to analyze the enterprise financial strategy. Then through the recent annual financial statements of Company B, it investigates and depicts the investment strategy, financing strategy and profit allocation strategy of this company; and reveals few shortcomings of financial strategy of this company. Finally, based on the overall analysis, this paper aims to give some constructive advices for the Company B and other real estate enterprises. Firstly, enterprises should vary financing channels and establish reasonable capital structure; secondly, set up scientific investment strategies; thirdly, establish risk control and forecast system for cash flow.