Study On The Capital Centralized Management Of Sinopharm

With the development of economic globalization, market globalization and informatization, the competition environment has changed a lot. The traditional growth model, which is described as extensive and expansive, is not suitable for the development of enterprise in the new environment. The new trend in corporate management that emphasizes capital management has been accepted by most of large business groups. The theory that the core of corporate management is financial management, and the core of financial management is capital management becomes more and more popular. Study on the capital management mode of business group in the new environment has realistic meaning for the developing of business groups in China. Based on transaction cost theory, asymmetric information theory and"Law and Finance"theory, we focus on capital management in business groups, especially for SINOPHARM, and get the conclusions as the followings:(1) We find some problems in capital management of SINOPHARM by empirical study. These problems include overmuch currency in subsidiary companies compared to parent company, subsidiary company leans towards short term loan compared to parent company, and the financial expenses and management expense is lack overall plans. This conclusion indicates that concentricity and efficiency in capital management of SINOPHARM should be increased. The regression analysis based on the data from the main medical commercial business groups in China arrange form 2006-2008 found that there is positive relationship between business groups performance and the concentricity of capital management, especially for currency, short term loans and current asset. So it is necessary to increase the concentricity of capital management.(2)Based on the realistic condition of SINOPHARM and the trends in business capital management, we put forward conceptualized capital management model based on CBS, which includes budget management, balance management, investment management, finance management and financial risk management. Especially we emphasize the effect of internal capital market in business group capital management.We hope the study will be of some benefit to capital management efficiency, internal capital market building, and shareholders'wealth creating in business groups in China.