Research On Enterprise Internal Financial Control Based On Cash Flow

Enterprise internal financial control based on cash flow takes cash flow as the basic tools to analysis and recognize financial risk existing in enterprise, and then control it in all aspects of production operations. Cash flow is the number arising from the increase of cash expenditure of cash income in enterprise production activities. Cash flow is the basis for business operations decision-making, the premise to calculate evaluation index making use of various project decision-making methods, and the foundation stone of project decision-making. Enterprises take cash flow as the evaluation basis for all activities operation decision-making, mainly due to:using the cash flow favorable conducive to evaluate value of time scientifically, ensuring the objectivity of evaluation, investment analysis, cash flow situation more important than profit or loss for enterprise, and using cash flow taking the gradual recovery of the investment into account.Financial risk, sometimes called market risk or price risk, which refers to price changes in market result in the risk of loss, and it has the characteristic of objectivity, universality, loss and variability, Financial risk is throughout enterprise operation, and financial risk may hide in various operation aspects. It is necessary for enterprise to manage financial risk, which can improve financial plan and management, offer message for decision-making, and assist in making more rational investment decision so on. The procedure of financial risk management can be divided into four steps:The first step is to recognize risk; the second step is to evaluate main risk; The third step is to confirm the risk grades and the plan dealing with the risk; And the fourth step is to supervise the risk. Cash flow and financial risk are fundamentals existing in production operation process, generally speaking, which influence each other. The change of cash flow can reflect the existence of corporate financial risk, and the existence of business risk can also lead to the change of corporate cash flow.Cash flow is divided into cash flow generated from operating activities, investing activities and financing activities, and the change of the cash flow in three links reflects the change of financial risk inside enterprises. So identification the existence of financial risk within the enterprise, we can supervise cash flow change of the three links. The way we adopt by in this thesis is from the direction of cash flow and financial indicators of cash flow to analysis the change of cash flow in three links. Just based on this, analysis cash flow of the financial activities in internal part carefully, we can control the key to control the financial risk. The study of this thesis is not only the succession and development of the internal control scholars studies in the past, but also cash flow which is the key factor of financial activities is integrated creatively into the present study, making internal financial control based on cash flow to a complete system, which is more suitable to survive and develop in today's business environment.As a intact system adapt to enterprise development environment, enterprise internal financial control based on cash flow expounds the theoretical foundation of the study firstly, then analyzes and discerns the financial risk according to the cash flow which is the key factor of financial activities, and finishes the purpose to control risk by controlling the key links of enterprise internal financial activity finally. Through which enterprise have theory and regulation to abide by when carry on internal financial control, and really make sure that theory is bound with practice perfectly.