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Characteristics Of Financial Flexibility

2011/1/8 13:23:00 41

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Corporate financial flexibility is reflected in all aspects of enterprise capital movement and financial activities:

1, the flexibility of capital raising.

Enterprise financing flexibility

First

It is manifested in fund-raising channels and ways.

The source and financing means of enterprise capital are not the only ones. Under the condition of market economy, the financing channels and ways of enterprises have diversified characteristics. However, for a particular enterprise, its financing should not only consider the influence of financing methods on enterprises' finance, but also consider the possibility of financing, for example, the state-owned enterprises can use it.

Country

Financial funds, rather than state-owned enterprises, can not be used in this way of financing; non joint stock companies can not raise funds through stock financing; stock companies increase capital and expand shares, enterprises borrow goods from banks, and issue bonds and so on. They have relatively strict restrictions. Therefore, enterprises must choose their financing ways and means flexibly according to their own conditions and conditions.

Secondly, it should be flexible in terms of financing structure and capital maturity.

Enterprise financing will inevitably consider the impact of new capital on the original capital structure of enterprises, because excessive liabilities will increase the financial risk of enterprises, and will increase the possibility of corporate crisis and bankruptcy. When the proportion of debt capital is larger, capital raising should avoid debt and choose equity capital as much as possible. For example, the proportion of equity capital in the capital structure of enterprises is larger. Because debt financing has a leverage effect, when the rate of return on investment is higher than the cost of debt capital, a moderate increase in debt capital can increase the income of equity capital. Therefore, enterprises should flexibly adjust their capital structure according to their own circumstances, maintain the reasonable capital structure of enterprises, and be good at using debt pools.

capital

There is also a flexible combination and reasonable allocation between the long-term capital, the short-term capital, the long-term capital and the short-term capital, so that it is possible to minimize all kinds of capital idle and waste, reduce the risk of financing, and give full play to the rational allocation efficiency of capital.

2, the flexibility of capital utilization.

Capital utilization includes two aspects: capital investment and capital operation.

Capital investment can be divided into project investment and financial investment.

Project investment belongs to enterprise's internal investment, including fixed assets investment, intangible assets investment, deferred assets investment and so on. Financial investment belongs to the enterprise's extra investment. It is mainly an investment behavior that enterprises indirectly invest in other enterprises by buying financial assets such as stocks, bonds, funds and so on.

The flexibility of capital investment is mainly manifested in the large scale of investment, the diversification of investment forms, the diversity of investment contents, the flexible adjustment of investment structure, the analysis of investment strategies in different situations, and the flexible use of investment strategies and methods.

Capital operation refers to a series of recurrent capital receipts and payments that happen in the course of daily production and operation.

The daily business activities and capital receipts and payments of enterprises will change frequently, such as the sudden increase of cash requirements, the shortage or sudden interruption of inventory supply, the rising of material prices, and the change of enterprise credit policy, all of which will increase the flexibility of capital operation of enterprises.

Enterprises will also adjust their capital operation at any time.

3, the flexibility of capital gains distribution.

The distribution of corporate capital gains is influenced by many factors, such as legal factors, shareholder factors, and enterprise factors. It is related to the interests of investors, creditors, employees and management authorities. These factors and stakeholders' interests will be changed due to different enterprises, different periods and different business environments and conditions. Therefore, enterprises should adjust their income distribution policies in time according to the possible changing environment and conditions.

The flexibility of capital gains distribution is not only reflected in the proportion of distribution, but also in the allocation of policy formulation and distribution forms. It is a policy intensive, widely involved and influential work. Enterprises must take full account of all possible factors affecting the interests of different interests, and choose the income distribution policy suited to their own characteristics on the basis of benefit to the development of enterprises and satisfy the interests of all parties. According to the different development periods and changing environments and conditions of enterprises, the enterprises should adjust their income distribution so as to ensure the adaptability and flexibility of enterprise income distribution policies.