Research On The Optimization Internal Financial Control System Optimization Of Shanghai Kai Bao

With market-orientation and globalization trends of economy, market competition is growing increasingly fierce. The 2013 statistics of the State Administration for Industry and Commerce indicates the mean survival time of the domestic companies bust up due to bankruptcy or other causes is only 6.09 years. From a global perspective, all lasting and successful companies take internal financial control as their life line and regard strengthened internal financial control as the secret weapon to their success. Internal financial control develops along with the rise of a company. For a company with small size and volume, the contradiction is not prominent; but when it grows bigger, its risks would increase and the demand for internal financial control would also rise accordingly. As corporate businesses grow rapidly, managers start to face more and more control-related issues which require the establishment of an effective financial control system.Against the above research backdrop, this paper, after reviewing the theories relevant to internal financial control, firstly presents the internal financing control situation in Shanghai Kaibao Pharmaceutical CO., LTD on the basis of the features of the pharmaceutical industry and Kaibao Pharmaceutical. Then, it attempts to pinpoint any potential risks and problems with the help of financial indicators and DuPont analysis model. These potential risks and issues, which include low total assets turnover, small equity multiplier, and rapid receivables growth, entail hidden dangers for corporate cash flow. After risk pinpointing, in accordance with the composition and operation mode of the internal financial system, this paper proposes optimization plans for each risks in terms of the organizational system, information system, and institutional system. Finally, some safeguard measures for the internal financial control optimization plans are put forward and a discussion into their feasibility and estimated results is presented.In order to forge Shanghai Kaibao into a "time-honored modern enterprise" and at the same time protect the legitimate interests of its investors, it is necessary to strengthen and standardize its internal corporate control. Analyzing and solving the underlying issues in the internal financing control system of Shanghai Kaibao after its IPO cannot only promote the building and development of corporate internal control system as well as corporate financial risk prevention capabilities but also provide some references to the financial risk control of its rivals.