Financial Management Of Sunning Company

I. Problems in capital management of enterprise groups

One

Decentralization and inefficiency

At present, the contradiction between the centralized management of enterprise group funds and the contradiction between the decentralized and occupied capital of subsidiary companies has become the most prominent problem in the capital management of enterprise groups.

This makes the group headquarters lack of unified management and planning of cash, leading to the phenomenon of multi company accounts opening, and a large number of idle businesses. In the meantime, the allocation of funds within the group is unbalanced, forming a deposit and loan ratio. It is reflected in the consolidated statement of the enterprise group, that is, the monetary fund project of the assets side has hundreds of billions or even billions of stock funds, while the debt side has a large number of bank loans, thus forming a large amount of interest expense under the financial statements of the profit and loss account.

2. ineffective supervision of funds and loss of assets

Due to the lack of necessary financial constraint mechanism, especially the lack of effective means of monitoring funds, the group company can not effectively supervise the quality and operation of the subordinate enterprises, and it is easy to generate funds out of circulation and capital management out of control. The following phenomena are shown: illegal lending funds, resulting in losses of millions or even tens of millions of dollars; illegal guarantee by enterprises, resulting in undue joint economic liabilities and legal responsibilities.

1., bring financial resources into full play.

Strengthening the centralized management of funds is beneficial to the realization of the strategic objectives of the group and the maximization of the overall interests.

It is manifested in three aspects.

(1) access to extensive and smooth financing channels and means.

Group enterprises gather the financing channels of each member enterprise, and through centralized management, unified scheduling and flexible allocation, they can timely integrate funds into the capital when the member enterprises need funds at lower cost and higher quality.

(2) access to extensive and smooth investment channels and means.

The group can assemble the overall market space, and when exploiting favorable investment opportunities, give full play to the overall capital advantage, make effective use of various investment channels, and achieve desirable returns.

(3) improve the efficiency of capital use and reduce the overall cost of capital.

The proper unified allocation and centralized management of the funds within the group can reduce the cash assets of the group and reduce the total amount of bank loans, thereby improving the efficiency of the internal capital use of the group and reducing the cost of capital.

2., strengthen financial supervision and ensure the safety of funds.

Strengthening the centralized management of group funds is conducive to strengthening the financial control of the group company.

Through the total control of capital inflow and outflow, group companies can first get the right to know the major financial matters of member enterprises. Secondly, through effective supervision of the revenues and expenditures of member enterprises, an effective decision-making and restraint mechanism is formed on major issues such as investment, so as to realize dynamic control of business activities and ensure the safety of fund use.

The choice of centralized fund management mode is essentially the embodiment of the strategy of centralized or decentralized management of enterprise groups, which is determined by the characteristics of its industries and the operation rules of capital groups.

According to the different degree of centralization and decentralization and the different operation rules of different industries, capital management can be roughly divided into the following two modes:

1. cash collection library mode.

The cash collection pool is composed of a set of bank accounts and internal settlement system accounts that form the upper and lower level linkage relationships and the capital receipts and payments and the corresponding accounting rules defined in this group of accounts.

In fact, when an enterprise group and its member enterprises are independent juridical persons, both sides establish actual accounts in the commercial banks, and the group accounts are managed by the group settlement center or the financial company as the settlement account or the first level settlement account. The accounts opened by the member enterprises are regarded as two level settlement accounts, and the funds are allocated and allocated by the cooperative commercial banks or the group settlement centers themselves according to the needs or agreements between the two level settlement accounts opened.

The enterprise group set up corresponding internal settlement accounts for the member enterprises participating in the centralized settlement at the group settlement center to record the debt and debt relationship between the one or two level settlement accounts.

When a member enterprise receives funds from outside the system, funds are pferred from the two level settlement account to the first level settlement account, and the group settlement center increases the balance of the internal settlement account corresponding to the two level settlement account. When the member enterprises pay outside the system, funds are pferred from the first level settlement account to the two level settlement account, and the group settlement center reduces the balance of the internal settlement accounts corresponding to the two level settlement accounts. When the two member enterprises pfer the system internally, the group settlement center increases or decreases the balance of two two level settlement accounts involving pactions, and the fund does not carry any movement in the external first level settlement account.