Research On Provincial (Yunnan’s) Ministry Of Finance’s Supervise About The Implementation Of Basic Rules For Enterprise Internal Control

Private enterprises of our country have a long history of development, during which they have encountered many problems. Especially under the macro-context that the economic development and growing ways of our country are going to have great transformations, the survival and development, financing bottleneck and life circle shortening are the problems which are rather outstanding and need to be handled during the process of their development.Recently, it’s very normal to see some private enterprises bankrupt or shorten their life span abnormally. This has already become a kind of normality during the developing process of the private enterprises. Insufficient financing platform and monotonous financing mode are the main inducing reasons for the quick bankrupt of the enterprises at a high liability rate. Therefore, this article proposes to research and analyze the financing mode of the private enterprises on different stages of their life circle and generalize the financing factors of the private enterprises through summarizing the current situations such as the current financing mode and financing capability and integrating the different features and influence factors in each stages so as to analyze the prefers of the private enterprises on the financing mode and the influence to its capital structure and to deduce the private enterprises’capital structure features in each stages of their life circle. Through the analysis abovementioned, we found:the progressive sequence for the private enterprises to choose their financing mode is from internal financing to external debt financing to external stock financing. That basically complies with the sequence theory of the financing mode. Among all financing modes, internal financing cost is the lowest, external financing cost is the second and the external stock financing cost is the highest. Therefore, this financing sequence is common and applicable for our private enterprises, taking the control right and our current financing circumstance into consideration.In view of the conclusion made above on the financing sequence of private enterprises, this article, in order to expand the applicable sphere, constitutes the model of financing mode which is based on the life circle of the private enterprises according to the 5 divisions of the private enterprises’life circle, (namely survival period, developing period, mature period, withering period and revival period) and provides the corresponsive choices and innovations, with a view to guiding the private enterprises in their commercial practice in financing realm.In order to prove the validity and applicability of the aforementioned conclusion and model constitution, this article, using the latest 10-years financing data of XDD where the author once worked, deeply analyzes XDD’s structure features of control right, financing mode and the process of its operation mode transformation of the latest 10 years. We found that XDD is fated to have a short lifespan because the current transformation of its operation mode is out of regulation. The monotonous financing mode and the wrong behavior of choosing an inappropriate financing mode for an inappropriate stage accelerate its bankrupt. Therefore, XDD vanished rapidly when it just entered into its mature period. The reason is that:the serious problems caused by its insufficient financing platform and monotonous capital accumulation during its developing period intensified and emerged out all in a sudden in its mature period. However, there was no other financing mode to defend the financial risk which was accumulated during its long period of operation and at last XDD had no choice but to end its business abnormally, in order to solve the problems accumulated during its life circle. That is also the essential reason for the short lifespan of medium and small private enterprises of our country which are still in their development period. Through analyzing the case of XDD, this article proves the validity and applicability of the progressive sequence of choosing financing mode and the model of financing mode based on the life circle of the private enterprises.The main contributions of this article are as follows:this article studies the financing mode of the private enterprises from the view of life circle, finds out the sequence of choosing financing mode in different life circle stages and constitutes, based on the enterprises’theory of life circle, the optional model for the enterprises to choose the suitable financing mode for different stages of their life circle; this article, through the analysis of XDD, provides the choice and innovation of financing mode and makes beneficial tries and supplements upon the theory and practice meaning in private enterprises’ financing field. The shortcomings are as follows:because of the restriction of studying and working circumstance, the latest economic data connected with this subject can’t be obtained. As a result, some conclusions which are drawn from old data lack the proof of the latest practice; at the president, the standard of the factors of life circle still needs to be optimized by the academic circle, therefore, the direct proved data model of private enterprises’financing mode and life circle influence factor can’t be erected and the essential theory can not be found to support a more precise analysis; the variable analysis of the quantification factors of the private enterprises’ life circle and the primary study on the continuous life circle theory will be the focal point and orientation of the further study of this article.