企业集团财务管理(英文版)

1,2019/2/4,Enterprise Group Financial Management,企业集团财务管理,2,2019/2/4,2,Enterprise Group Financial Management,Brief contents : 1.an overview of enterprise group financial management 2.system and content of enterprise group financial management 3.enterprise group financial corporation 4.performance measurement and evaluation of enterprise group,3,2019/2/4,3,(1)types of enterprise group (2)structure of enterprise group (3)features of enterprise group (4)financial characteristics of enterprise group,1.An overview of enterprise group financial management,4,2019/2/4,4,Share-controlling enterprise group Mixed enterprise group Managerial enterprise group,(1)types of enterprise group,5,2019/2/4,5,Parent corporation Subsidiary corporation,(2)structure of enterprise group,6,2019/2/4,6,Parent corporation is also called share-controlling or multidivisional corporation, and is a corporate enterprise that finances for subsidiary corporation and serves as functions of contributor and capital operation. Its registered capital must reach above RMB500 million and its number of subsidiary corporations at least reaches 5 .,1.Parent corporation（1）,7,2019/2/4,7,Approved by state council or other regulatory authority, the amount of investment to other corporation by parent corporation shall be above 50% of its net assets.Branches of parent corporation are not legal person. Rights: income rights, major decision-making rights, selection of manager,1.Parent corporation（2）,8,2019/2/4,8,Stock participating corporation Collaboration unit,2.Subsidiary corporation（compressed hierarchy),9,2019/2/4,9,Legal features Organizational features operational features Financial features,(3)features of enterprise group,10,2019/2/4,10,Complex propertiesright relationship Diverse financial entity and multi-level financial decision-making Diverse investment fields Frequent affiliate transaction,(4)financial characteristics of enterprise group,11,2019/2/4,11,(1)basic models of enterprise group financial management system (2)financial organization and decision-making mechanism (3)contents of enterprise group financial management,2.system and contents of enterprise group financial management,12,2019/2/4,12,centralization decentralization Divisional system,(1)basic models of enterprise group financial management system,13,2019/2/4,13,Financial management Power of parent corporation Direct decision-making to all major financial matters Establishing financial institutions of subsidiaries and appointing or dismissing financial managers of subsidiaries,1.centralization（1）,14,2019/2/4,14,advantages：develop compounded strengths of resources；realize the purpose of enterprise group financial management；reduce capital cost disadvantages：slow market response；eliminate activities of subsidiaries；lack of rational division of labor and collaboration,1.Centralization （2）,15,2019/2/4,15,Parent corporation only retains power of decision-making and approving of major financial matters of subsidiary, and gives daily financial decision-making power and managerial power to subsidiary corporation.,2.Decentralization （1）,16,2019/2/4,16,advantages：subsidiary has full power of decision-mading and is more easy to grasp market opportunity. disadvantages：is bad for finding out operation problems of subsidiary in time；subsidiary corporation purse its own benefit at the expense of benefit of group corporation.,2.decentralization（2）,17,2019/2/4,17,High centralization Divisions have power of autonomy, but have no right to alter budget decided by headquarter Headquarter has function of financial management,3.Divisional system,18,2019/2/4,18,Financial resources on its own have free concentration and seperation. Group financial management does not emphasis on divisionsability to change in finance . Powers on finance involve with substantial benefit of related parties, so integration of group resources needs centralized financial management.,4.Reasons for Centralization tendency of financial management system,19,2019/2/4,19,Dealing with relationship between parent and subsidiary corporation must be on the basis of properties right. Reflecting fully strategic idea of financial management. Subject to different organization structure of enterprise group .,5. Designing principle of financial management system,20,2019/2/4,20,Financial management institution of enterprise group Limits of authority of parents board of directors Limits of authority of financial headquarter of group Financial settlement center,(2)financial organization and decision-making mechanism,21,2019/2/4,1.organization of enterprise group financial management,22,2019/2/4,22,（1）to formulate, replace, interpret and implement financial strategic and policy. （2）to choose, establish and replace financial management system and organization. And to appoint, dismiss top financial executives of headquarter. （3）to decide on financial matters of parent and deal with exceptional financial matters.,2.Power of directors board of parent,23,2019/2/4,23,（1）to provide information support to financial policy and decision of parents board of directors. （2）to be responsible for organizing and implementing whole financial policy of group. （3）to be responsible for drawing up, implementing and supervising strategic budget. （4）to plan optimizing capital structure of group. （5）to harmonize financial relationship between related parties internally and externally of group.,3.financial power of group financial headquarter,24,2019/2/4,24,Financial settlement center is responsible for cash receipt and payment and settlement of receivables and payables between parent, subsidiary and other corporations. Duties and powers：capital credit center; capital overseen center；capital settlement center；capital information center,4.financial settlement center,25,2019/2/4,25,Financial management between parent and subsidiary Financial relationship in enterprise group Externanl financial management Internal finance,(3)contents of enterprise group financial management（1）,26,2019/2/4,26,External investment management of enterprise group Internal financial relationship of enterprise group Internal transfer price of enterprise group Income allocation management of enterprise group Financial supervision and control of enterprise group,(3) contents of enterprise group financial management （2）,27,2019/2/4,27,Is mainly referred to propertiesright relationship between parent and subsidiary including propertiesright relationship management and propertiesright structure management。 Establishing propertiesright structure need considering fully strategic benefit of parent.,1. Financial management between parent and subsidiary,28,2019/2/4,28,Financial relationship between group corporation and units directly under group Financial relationship between group corporation and affiliate corporation,2. internal financial relationship of enterprise group,29,2019/2/4,29,（1）issues of inter-group on stock equity finance （2）issues of inter-group on debt finance （3）issues of capital raising entity,3. external capital raising,30,2019/2/4,30,The capital source is from internal divisions of group,4. internal capital raising,31,2019/2/4,31,The important point considering when investing on external equity is strategic objective not capital accrue. When selecting investment field, an point that should be considered is strengthening main business and expanding new business field.,5. external investment management of enterprise group,32,2019/2/4,32,contents：projects investment management in group and mutual investment management between inter-corporations principles：independent entity principle and integrated harmonize principle,6. internal investment management of enterprise group,33,2019/2/4,33,Market price Negotiated price Dual transfer price Cost-based transfer price,7. internal transfer price of enterprise group,34,2019/2/4,34,Allocation on the basis of capital contribution amount Allocation on the basis of stipulation written in agreement Allocation on the basis of stipulation written in contract,8. management of income allocation of enterprise group,35,2019/2/4,35,Staff control System control Auditing control,9. financial control of enterprise group,36,2019/2/4,36,(1)functions of financial corporation (2)business scope of financial corporation (3)risk control of financial corporation (4)business relationship of financial corporation,3.financial corporation of enterprise group,37,2019/2/4,37,Settlement function Capital raising function Investment function,(1)functions of financial corporation,38,2019/2/4,38,Lending business Receivable finance Commercial finance Consumer loan,Settlement business Principal business Agent business,(2)business scope of financial corporation,39,2019/2/4,39,related stipulation about risk control Internal control of risk,(3)risk control of financial corporation,40,2019/2/4,40,The ratio of total capital to risk assets shall not be less than 10%; The ratio of one-year-above long-term liability to total liability shall not be less than 50%; Liability balance owed to outside of group shall not be greater than that owed to internal division of group; the ratio of long-term investment to total capital shall not be greater than 30%； Consumer credit and buyer credit shall not be greater than 70% of related products sale price.,related stipulation about risk control,41,2019/2/4,41,Establishing sound organization structure and regulations Sound separation of duty principle Establishing strict system of business authority and approving and examination Sound accounting system Establishing effective and scientific information management system Effective internal auditing,internal control of risk,42,2019/2/4,42,The relationship between financial corporation and other financial institutions The relationship between financial corporation and enterprise group The relationship between financial corporation and financial department of enterprise group,(4)business relationship of financial corporation,43,2019/2/4,43,(1)return on investment (ROI) (2)residual income (3)economic value added(EVA) (4)balanced scorecards,4.performance measurement and evaluation of enterprise group,44,2019/2/4,44,(1)return on investment,45,2019/2/4,45,46,2019/2/4,46,Return on investmentS subsidiary：ROI=24/100=24%C subsidiary：ROI=30/200=15%N subsidiary：ROI=51/300=17%,47,2019/2/4,47,Advantages：a reflection of profitability；comparability；a basis of selecting investment projects；a measure of operation achievements disadvantages：each subsidiary only focuses on its own benefits but abandons some projects beneficial to whole group enterprise.,Characteristics of ROI,48,2019/2/4,48,Residual income（RI）=net income of subsidiary-net assets of subsidiaryimputed return on investment or：=net assets of subsidiary（actual return on investmentimputed return on investment）,(2)residual income,49,2019/2/4,49,Residual income Assume imputed return on investment is 12%S subsidiary：RI=24-100 12%=12C subsidiary：RI=30- 200 12%=6N subsidiary：RI=51- 300 12%=15,50,2019/2/4,50,Comparing ROI and RI Take the example of S subsidiary： ROI=24%；RI=12万 Assume there is a new project, it need increasing investment of 800 thousand yuan, its net income is 160 thousand yuan, ROI is 20%。so： ROI=（24+16）/（100+80）=22.2% RI= 40-18012%=18.4万,51,2019/2/4,51,Advantages：RI facilitate goal congruence . Disadvantages：RI distorts comparisons between subsidiaries of different sizes,(2)Characteristic of RI,52,2019/2/4,52,Differing from accounting profit, economic value added（EVA）refers to an enterprises actual income net of invested capital cost by its shareholders. EVA=after-tax operating profitinvested capitalaverage cost of capital,(3)economic value added,53,2019/2/4,53,EVA is the most contemporary and the hottest financial measure。fortuneonce disclosed average level of performance of corporation adopting EVA beyond that of reference team： The first year，average level is 2.87% The second year，average level is 12% The first year，average level is 12.2% Sources:independent research report,Comment on EVA,54,2019/2/4,54,1996 1997 1998 1999 200 net income （billion yuan） 60 10 70 88 99 earnings per share（yuan） 1.2 0.18 1.15 1.40 1.20EVA(billion yuan） -1 5 -20 -33 -65,EVA of Enron corporation,55,2019/2/4,55,Sichuan changhong corporation incurred 2.8 billion yuan of book profit from 1998 to 2000, but from the viewpoint of EVA, the corporation incurred -1.1 billion yuan of EVA last three years. Deviation of EVA from accounting profit has taken place in Corporations such as qingdao beers Inc.,shenzhen chiwa Inc and shenzhen development Inc.,EVA of Chinese corporations,56,2019/2/4,computation of EVA,EVA =after-tax operating net income- invested capitalaverage capital cost,57,2019/2/4,57,Invested capitaltotal assets at the beginning of a period at the balance sheetnonproductive assets during the period十assets recognized as expense by accounting but as investment by economyproductive assets exclusively of balance sheet,Determination of invested capital,58,2019/2/4,58,after-tax operating net incomenet incomeextraordinary operating incomeexpenses adjusted as invested capitalfinance expense accrued to costother adjustments,Computation of after-tax operating net income,59,2019/2/4,59,Weighted average cost of capitalcost of debtpropotions of debt to total capitalcost of equity debtpropotions of euity to total capital,Computation of capital cost,60,2019/2/4,60,Continuing of the preceding example： Assume book value of total assets of the group is 6 million yuan(long-term liability is 4.5 million yuan, face value of capital is 1.5 million yuan and capital market value is 3 million yuan)；interest rate on long-term liability is 10%, return rate on equity is 15%.weighted average cost of capital=（0.07 450+0.15 300）/（450+300）=10.2%,61,2019/2/4,61,S subsidiary：EVA=24-10.2%95=14.31C subsidiary：EVA=30- 10.2%185=11.13N subsidiary：EVA=51-10.2%270=23.46,62,2019/2/4,62,To emphasis on share capital cost To align decision with shareholderswealth To finish confusion result from multiple financial measures,Advantages of EVA,63,2019/2/4,63,summaryranking of performance（from high to low）ROI：S subsidiary、N subsidiary 、C subsidiaryRI： N subsidiary 、S subsidiary 、C subsidiaryEVA：N subsidiary 、S subsidiary 、C subsidiary,64,2019/2/4,64,questions：how should we choose performance evaluation measures？how we understand the meaning of assets when computing performance measures？,65,2019/2/4,65,A method of performance evaluation which aligns financial measures with non-financial measures and evaluates performance through four areas including finance, customer, business and production process and learning and growth.,(4)balanced scorecards,66,2019/2/4,Financial performance How should we appear to our shareholders?,Business and production process performance At what business practices must we excel?,Learning and growth Performance How should we sustain our ability to changeand improve?,Customer performance How should we appear to Our customers?,Vision and strategy,67,2019/2/4,67,Balance of financial measures and non-financial measures Balance of short-term objective and long-term objective Balance of achievements and cause Balance of inside and outside of enterprise,Features of balanced scorecards,68,2019/2/4,68,Specifying objective and strategic of an enterprise Focusing on evaluation on non-financial performance and tying result evaluation to process control Emphasis on principle of Customer-oriented, and retaining and reaping competitive advantages Realizing congruence of short-term benefits and long-term benefits,Benefits of a balanced scorecard,69,2019/2/4,69,2019/2/4,Thanks!,