Research On Cash Flow Management Of H Company Based On Value Creation

The essence of capital is to gain profit,but it is easy to ignore the safety and sustainability of cash flow and cause the risk of enterprise production and operation only by taking profit as the center of production and operation.It is the basic trend of enterprise production and management that the goal of "profit maximization" turns to the goal of "value maximization".Cash flow is the link for the smooth development of various businesses of the enterprise.The entity free cash flow is the power source for the value creation of the enterprise.The value creation achievements of the enterprise are also displayed through various indicators of cash flow.Healthy cash flow is conducive to the continuous value creation of enterprises.This paper discusses the strategic and tactical management of cash flow by introducing the value creation perspective into cash flow management.This paper constructs a research framework of cash flow management based on value creation.Based on the perspective of value creation,this framework makes a concrete analysis of the free cash flow,cash flow structure and indicators of enterprises,and analyzes how to promote the value creation of enterprises from the perspective of cash flow management from the strategic and tactical dimensions.In this paper,H company,a private enterprise,is selected as a case study to analyze the current cash flow situation of the enterprise by using the analysis framework.It is found that H company has the problems of insufficient free cash flow,weak solvency and low turnover rate of accounts receivable.There are contradictory points in its cash flow management system that are inconsistent with the goal of value creation.In view of the problems existing in the value creation of H company’s cash flow management system,this paper holds that H company should improve the strategic awareness of value creation as the core,strengthen the control of cash flow budget management,improve the internal control of process management,improve the turnover rate of account and inventory,and build a risk early warning mechanism,so as to promote the enterprise’s cash flow management system to better serve the purpose of value creation Mark.