Effects Of The Combination Of Industry And Finance Capital On Enterprises’ Value-the Case Study

In the long-term development process, enterprise group who regard the industry as the main body continues to grow and develop, but with the increasing competition, in order to further expand production capacity and enhance competitiveness, the companies began to invest in financial institutions or establish financial companies and so on to participate in the financial sector. In this process and under the synergy of financial capital and industrial capital, some companies obtain high returns and increase enterprise value; others ignore the potential risks, leading to the capital chain rupture, and eventually led to the bankruptcy of the enterprise group.Therefore, the combination of finance and industry for businesses is likely to be positive, also may be negative. So supervision of the combination is necessary. In addition, we should complete the work of collaborate between industrial capital and financial capital, reduce the negative impact of the combination, only in this way can add momentum to the development of enterprises for long-term profit growth.Through data collected earlier, we discover that enterprises in the implementation of the strategy of combination between financial and industry, the impact of different strategic approaches for corporate value are not in the same path. How the combination increase enterprise value, what’s the difference between the different ways of strategic implementation path, and how to effectively prevent risks, these are the goals of this paper.This paper summarizes the relevant research at home and abroad and collecting relevant information, made the following work. First, we define the combination of finance and industry and the enterprise value; Secondly, we elaborate the present situation of the research about the combination; Again, we make a theoretical analysis of how the combination affect enterprise value, and select two cases before and after the combination by the relevant financial data to determine the impact of each affect enterprise value; Finally, we select two cases including Younger Corporation and Shanghai Automotive Group,through the comparative analysis, we find that process of different combination approach affect enterprise value is done through a different path. No matter what path model, should be based on enterprise industry entity, and in order to prevent risk, companies can’t be blind into the financial sector.This paper has two contributions. First of all, we do the comparative analysis based on the different combination models. Secondly, regarding the case study as the main way and starting from a financial management perspective, we summarize how the combination affection corporate value. All the data are from annual report after audit disclosed by the enterprises, and we measure the effectiveness of the combination from the perspective of financial management associated with enterprise value. Deficiencies of this paper is that the coverage of combination issue is very wide, involving levels is relatively complex, this paper studies the enterprise value is merely for the financial indicators of the performance characteristics, due to the data and the limitations of my research skills, we do not have too much attention on non-financial indicators. I hope i can make up it in the future.