Research On The Efficiency And Improvement Of The Internal Capital Market Of FZ Group

Driven by the wave of globalization,China's economy has also enjoyed the dividend of world trade and realized the transition from low-to medium-speed development to high-speed development.At the same time,global competition has also brought about the sustainable development of Chinese enterprises.In order to enhance the overall strength of the company,along with the trend of large-scale expansion of American companies,domestic enterprises are also beginning to position themselves in a diversified business strategy,gradually shifting from a single industry development to multiple industries,and finally form a group through mergers and acquisitions.In this process,the demand for funds from enterprises has been increasing,and with the constraints of external financing,the group companies have begun to try to make up for the shortcomings of external financing through internal capital allocation.The efficiency of capital allocation in the internal capital market plays a crucial role in the Group's ability to effectively integrate the resource advantages of its subsidiaries.However,because of the dual agency phenomenon in China's enterprises,the separation of the two powers has also led to the problem of derivative agents.Many companies do not pay attention to actual efficiency and blindly expand,resulting in the internal capital market efficiency decline or even invalid.Therefore,it is of great practical significance to study how to strengthen the financial control of China's internal capital market,improve the efficiency of internal capital market,and increase the overall value of the group enterprise.Taking the efficiency of internal capital market as the starting point,this paper selects the state-owned enterprise FZ Group and its six listed companies to conduct case studies.Based on an in-depth analysis of the internal capital market construction process and operation mode,based on the 2013-2017 financial statement data of FZ Group and its six listed companies,the Adjusted Profit-Sensitivit method is used to calculate the capital allocation efficiency of the internal capital market.The calculation results show that the internal capital allocation behavior of FZ Group is almost ineffective.According to the analysis of the investment opportunities and capital flow data of each subsidiary based on the actual operating conditions of the Group,it is found that the capital allocation of the internal capital market of the Group has problems of excessive cross-subsidization within the group,propensity for the interests of the group,and excessive investment by the group.On this basis,the reasons for the problems are analyzed,mainly in the following aspects: the group's strategic operation and financing strategy are radical,the internal governance of listed companies is not perfect,and the internalmanagement system of the group is not perfect.Finally,based on the factors affecting efficiency,this paper proposes to improve the internal capital market allocation efficiency of FZ Group from the two major directions of adjusting group related strategy and internal capital allocation strategy and strengthening internal capital market entity management.It is hoped that through the exploratory research results of this paper,it can help solve the problem of the capital allocation of the existing capital market of FZ Group,and also provide reference for other group companies to carry out internal financial management and control and improve the efficiency of internal capital market.