Research On Financial Strategy Optimization Of Chenming Paper Based On Enterprise Life Cycle

As a traditional manufacturing industry,the paper industry has a relatively high dependence on wood pulp and other raw materials in production,and has high requirements for environmental protection.Therefore,it is resource-intensive,capital-intensive and technology-intensive.Because the paper industry pays attention to the improvement of scale and efficiency in the production and operation,the production cost and turnover efficiency are the key to enterprise competition.Chenming Paper is a large state-owned enterprise with a relatively long time in China.It has an important position in the industry.In 2014,due to the slow growth of paper products business,the company’s future development space has narrowed,and it has chosen to transform and upgrade.The business policy is mainly to enter the field of financial leasing.Since 2018,the economic environment at home and abroad has changed a lot.The macroeconomic environment has generally shown a downward trend.The market interest rate has risen rapidly.The financial expenses of enterprises have increased by 35.9% in the first three quarters,and interest expenses have increased by 50.61% year-on-year.The long-term debt ratio is high and the financial leverage is high,which seriously affects the profit growth and sustainable development of enterprises.The financial strategy of the enterprise needs to be properly optimized.This paper regards the enterprise life cycle theory and financial strategy theory as the main theoretical basis for the study of Chenming Paper.Through the analysis of Chenming Paper’s sales volume and cash flow,combined with the growth trend of the paper industry in the industry,it is determined that Chenming Paper is now The main business(paper)is a mature period,and other businesses(financial leases)are in the growth period.Then,after analyzing the current financial strategy of Chenming Paper,it was found that Chenming Paper’s financial strategy showed an overall expansion trend,and reached five conclusions:(1)Due to changes in the financial environment,Chenming Papershould promptly Financial strategy turned to a stable type,reducing financial leverage;(2)financial strategy adjustment should be combined with sustainable growth model,the main focus is to reduce costs,improve profit margins,optimize inventory turnover,increase internal retention;(3)fundraising strategy Mainly adjust the debt structure,from short-term debt financing to medium-and long-term,reduce debt ratio,realize debt-to-equity swap,emphasize risk management;(4)investment strategy to maintain main business growth needs,control M&A activities;strengthen project feasibility Research;(5)Profit distribution strengthen internal retention ratio,explore multiple profit distribution,and strengthen incentives for talents.In short,this paper hopes to promote the sustainable development of t he company through the financial strategy research of Chenming Paper.At the same time,it can continue to expand the application scope and theoreti cal research of life cycle theory,and add enough empirical evidence for the conceptualization of stocks.