Research On Financial Flexibility Decision Based On Business Strategy

In recent years,with China's economic engine shift,based on the "demographic dividend" and "policy bonus" of the extensive growth mode gradually lost in the economic effect.In the "new normal" period,companies need more refinement of its operation and management,and market competition is also increasing.In this new situation,more and more scholars have begun to pay attention to the concept of financial flexibility,and have carried out a thorough research on it.Most of the existing studies have three aspects: first,the financial flexibility is regarded as the final result.This kind of research usually starts with the capital structure,and interprets the enterprise to maintain a certain capital structure in order to maintain financial flexibility,and then no longer further analysis;secondly,from the "afterwards" angle,the research enterprise is certain.The impact of financial flexibility on other factors;thirdly,the financial resilience is regarded as a static process,assuming that the firm will not change at a certain level of financial flexibility.Although these studies have pointed out the important value of financial flexibility,they do not clearly reflect the support factors of financial resilience decision,and under what conditions should the financial resilience be saved,and when should the financial flexibility be released?This paper is a step forward on the basis of these studies to study how the financial flexibility of the enterprise is made.Through theoretical analysis and case studies,this paper finds that financial flexibility decision is closely related to business strategy of enterprises,and the two can play a complementary role.On the one hand,the business strategy determines the financial flexibility of the enterprise.Different business strategy types will make enterprises take different strategic behaviors,and then accept different types of strategic risks,while different strategic behaviors and strategic risks need to match different levels of financial flexibility.If the financial flexibility of the enterprise is contrary to its strategic type,the financial flexibility will not play its due role,that is,there is no value.On the other hand,financial flexibility serves the business strategy and plays a supporting role.And only in the company's financial flexibility and business strategy to match is to play these supporting role.After theoretical analysis and case study,the paper further proposes how to make financial flexibility level to match business strategy.First of all,for the enterprise that uses the Explorer strategy,there is a dynamic process of accumulation and release of the financial flexibility of the enterprise.Secondly,to reduce financial flexibility on the premise of not affecting financial safety,we can reduce financial flexibility cost on the premise of the exploration strategy,and on the other hand,we can effectively leverage the financial leverage effect.Thirdly,for the enterprises adopting the strategy of analysts,they should take different financial flexibility strategies according to the macroeconomic environment,the characteristics of external competitive environment,their strategic tendencies and the life cycle of enterprises.Finally,for strategic transformation enterprises,we should make comprehensive judgement based on the type of strategic change and the motivation of strategic change,so as to decide the accumulation and release of financial flexibility.