Research Of Enterprise Financial Management Model Based On Value Creation

The exist of enterprise is to create value, value creation defines that investors gain return oninvestment which is more than cost of capital, which means when return on investment is morethan cost of capital, enterprises create value for investors. Since the eighties of 20th century,value creation-oriented management thoughts has become very popular in western enterprises,many enterprises which have performed value creation-oriented management have gained a bigsuccess. But the modern financial management of enterprises in China is very late, so it restrictsthe research on the theory of enterprises financial management. Face to the intense globalcompetitive environments, enterprises in China is only to build a management model whichtakes the value creation as the core, so they can accumulate the strength effectively, increase thevalue of enterprises, win the position in the competition. The research on value creation-orientedenterprise financial management model is become the urgent needs objectively. Based on hugeneeds of theory and reality, so enterprise financial management model based on value creation isbecome the research subject of my article.The article is to build the theory of enterprise financial management model based on valuecreation in principle, because the content of the financial management model is very extensive.The article defines the intension of enterprise financial management model based on valuecreation, reconstructs the value creation-oriented enterprise financial process, exposes themanagement function of enterprise financial management model based on value creation, inorder to help the enterprises in China which face the intense global competitive environmentsestablish value concept, build up value creation-oriented decision-making system and how tocreate value in the daily operation and management.The article is mainly on standard study, the basic framework is as follows:The first chapter exposes the theory basis of enterprise financial management based onvalue creation, the basis is enterprise value theory and value based management thought, thenenumerates three kinds of existing financial management model based on value.The second chapter outlines the intension of enterprise financial management model basedon value creation, enterprise financial management model based on value creation refers to thegoal of maximum of enterprise value as the starting point, implements how to improve thecreation of enterprise value through financial management circulation which has investmentactivity, business activity and finance activity and financial management function which hasvalue plan, value control and value appraise, realizes a kind of management model of sustainablegrowth of enterprise value.Chapter three and chapter four discuss how to create value in finance route from differentviews, it is the further promotion of the model that chapter two defines. The third chapterexposes how to improve the value creation of enterprises through financial managementcirculation which has investment activity, business activity and finance activity. The fourthchapter exposes how to improve the value creation of enterprises through financial managementfunction which has value plan, value control and value appraise.Chapter five mainly discusses the application of enterprise financial management modelbased on value creation, at first explains the implementation step of this model and key factor ofimplementation success, then put forward concrete measures of enterprises in China toimplement enterprise financial management model based on value creation.