Research On The Key Role Financial Management Play In The Firm Value Creation

The economic society is now going through a transformation from industrialeconomy to intellectual economy, which consequently make the environment of the enterprise management more competitive and complicated than before. The fittest survives. So the traditional financial management can no longer fit the ever changing environment with its several drawbacks. And the combination of strategic management with financial management will prove to be the best choice by history. "Value creation" is an inspirational rule in modern management. It is also the main duty of modern management.This thesis consists of six sections.The first section is the basis of the whole, including the economic background of the thesis, chievements in relevant research, research method and construction of the thesis. In the second section, first, discuss the main category of company finance ,such as finance capital, material capital and value. Second, study the knowledge capital and put forward the idea of company finance model based on knowledge capital. On the basis of the first two sections, the next two sections i.e. The third and the fourth are the key parts. The third section expound basic financial principle based on value creation, Including the concept of value creation, value evaluation, financial connotation, characteristic and procedure .In the end, analyzethe value-driving factors. The fourth section studies the financial route of value creation, Including value-chain management, financial strategy, capital operation and knowledge capital. Optimizing the value-chain can reduce an enterprise's cost and improve its competence. Choosing suitable way of capital operation and financial strategy is very important for company to create value. The fifth section mainly introduces the Economic Value Added and the Market Value Added .The Last section summarizes the thesis and points out the future researchdirection in this field.The desire of researching on this theme is to help Chinese enterprises do better and better in the international competition.