Research On The Financial Control For Private Enterprise Group

The study background of this essay is the rapid growth of private companies with a lot of problems in management, company strategy and financial control. The trend of private companies'boosting development is obvious to all. They affect the country's economy, and their status should not be neglected. However, some inherent weaknesses of this kind of companies would be huge obstacles in front of them, especially for large groups with multi-products and multi-industries. There is the typical case-DeLong group, which has startled all over the country for collapsing from a famous group to a heavy-debt one. Therefore entrepreneurs and scholars begin to doubt its development mode, which was chased by many groups. Although there are some troubles during the process of industry acquisition such as choosing merger companies and integrating after merger, capital broken up and heavy debt in the group and its subsidiaries should be the real reasons for its crash when government changed industry policies. Other private enterprise groups begin to check themselves under this pressure. All above indicates that it is necessary to take further analysis and academic study of this phenomenon.The target of this essay is to establish an effective financial control mode for private enterprise groups through analysis of some real companies such as DeLong, and stating the detail of contents, processes and their relationships. We are looking for a method to assure financial stability and safety when a group is at its speedy growth phase, and to make the business strategy come true.This essay introduces a mode of financial control management based on existing relative document and some private companies. It could be used for supervising financial status and raising the alarm advanced to take suitablestrategy planning and carry out their targets of the whole group. This mode includes two parts of factors named core factors and basic factors. The core factors of group's financial control are based on account and financial index. These financial methods are cash flow control, budget control and return of invest control. But it is not enough. It should be supported by good financial control environment, which COSO and other famous systems paid attention to. Financial control environment is the basic factors in this essay, including finance strategy, management system and information system. This control mode is adapted for private companies'demand in this phase. Private companies or groups are able to solve the most important issues with their entire vigor under limited resources.It is obvious that there is nothing without disadvantage. Every company has its own history, culture, merit and weakness. There is no common principle for every firm. What we will do in the future is improving this mode and studying the details, especially by analyzing companies'situation in different categories and figuring out the operational directions.