What is financial management?

Financial management is an economic management work to organize enterprise financial activities and deal with financial relations. The following is my summary of financial management, I hope you read it carefully!

1. Contents of property financial management

The content of financial management can be divided into three parts: long-term investment, long-term financing and working capital management.

(1) Long-term investment

If the time from cash outflow (investment) to cash inflow (investment recovery or return) exceeds one year, it belongs to long-term investment. Short-term investment refers to the investment in which the time from cash outflow to cash inflow does not exceed one year. Short-term investment is usually discussed in financial management and working capital management.

The types of long-term investment mainly include:

1. Direct investment in operating assets

Operating assets mentioned in financial management include buildings, factories, machinery and equipment, inventory, etc.

Direct investment, that is, direct investment in operating assets with cash to gain direct control over operating assets, and use it to carry out business activities and obtain cash returns. The main goal of direct investment in operating assets is to obtain all kinds of physical resources needed for operation, rather than to obtain the proceeds from asset resale.

2. Direct investment in financial assets

Financial assets generally refer to stocks, bonds and various derivative financial instruments.

3. Direct investment in other companies

The main purpose of direct investment in other companies mentioned here is to control the assets and management rights of the invested company, so as to increase the value of the enterprise, rather than simply to get dividends.

(2) Long-term financing

Long-term financing refers to the long-term funds needed for the production and operation of enterprises, that is, funds that can be used for a long time. The amount of long-term funds raised should be determined according to the demand for long-term funds, and the two should match.

Long-term funds include stock funds and long-term debt funds. Issuing shares and increasing capital and shares are typical equity financing methods; Borrowing from banks and issuing creditor's rights are typical ways to raise debt funds.

The main problems in long-term financing decision are capital structure decision, debt structure decision and dividend distribution decision.

(3) Working capital management

Working capital is the capital invested in the daily business activities of an enterprise. Working capital management deals with short-term financial problems of one year or less.

Working capital = current assets-current liabilities

Therefore, the content of working capital management can be divided into two aspects: one is the investment management of working capital to current assets, and the other is the financing management of working capital to current liabilities.

1. Working capital investment management

Current assets refer to the assets that an enterprise can realize or use within a business cycle of one year or more, mainly including monetary funds, short-term investments, notes receivable, accounts receivable and inventories.

The main contents of working capital investment management are cash management, inventory management and accounts receivable management.

The cash management of enterprises should not only meet the transactional needs of daily business, but also take into account the preventive needs and speculative needs.

Inventory is the materials reserved by enterprises in the process of production and operation, including materials, fuels, low-value consumables and so on.

Accounts receivable are the money that an enterprise should collect from customers who have purchased products or received services but have not yet received them.

2. Working capital financing management

Current liabilities are the debts that an enterprise will repay within a business cycle of one year or more, including short-term loans, notes payable, accounts payable, accounts received in advance, wages payable, welfare payable, long-term liabilities due within one year and other current liabilities. The service fee received in advance by the realty service enterprise is a current liability.

Working capital financing policy refers to how to raise funds for current assets, whether to use short-term funds or long-term funds, or both.

Second, the objectives of property financial management

As an operating organization, profit is the most basic and important goal of an enterprise.

(A) financial management objectives to measure profits

From the perspective of measuring profits, financial management objectives can be measured from three aspects:

1. Profit maximization

Profit is the difference between the total income and total expenditure of an enterprise in a certain period. Profit not only reflects the economic benefits of enterprises, but also shows that the competitiveness of enterprises determines the survival state of enterprises to a certain extent.

However, taking profit maximization as the financial management goal has some shortcomings:

(1) Do not consider the profit acquisition time.

(2) The relationship between the profit earned and the amount of capital invested is not considered.

(3) The relationship between income and risk is not considered.

Profit maximization is an acceptable short-term goal under the conditions of the same investment capital, the same profit acquisition time and the same related risks. However, we still need to pay attention to that if we only aim at maximizing profits, it may lead to short-term financial decisions of enterprises, thus affecting their long-term good image or sustainable growth ability.

2. Maximize earnings per share

Earnings per share (or net interest rate of equity capital) is the ratio of net profit to net assets (or owner's equity), which reflects the ability of an enterprise to make profits by using its own capital.

The advantage of this goal is to compare the profits realized by enterprises with the amount of capital or equity invested, which can explain the profit rate of enterprises, and can be compared among enterprises with different capital scales, revealing and evaluating the differences in their profit levels and different development prospects. For joint-stock companies, many investors regard earnings per share as the most important index to evaluate company performance. However, this goal still has the following shortcomings: (1) still does not consider the time of earnings per share; (2) Still do not consider the risk of earnings per share.

3. Maximize the wealth of shareholders

The maximization of shareholder wealth can also be expressed as the maximization of enterprise value. Increasing wealth is an important goal for shareholders to start a business. If an enterprise cannot create value for shareholders, shareholders will not provide capital for the enterprise, and the enterprise will not exist.

The wealth of shareholders can be measured by the market value of shareholders' equity. The market added value of rights and interests is the value created by enterprises for shareholders. .

Maximizing shareholder wealth can also be called maximizing stock price.

Combining the advantages and disadvantages of the above three indicators, in financial management, the maximization of shareholders' wealth is usually regarded as the goal of financial management.

(B) financial management objectives and stakeholders

1. Financial management objectives

An important influencing factor of financial management goal, or enterprise goal, is how to treat the needs of stakeholders. Such as shareholders' rights and interests, paying taxes, providing employees with remuneration and benefits, and providing customers with satisfactory products and services.

2. Stakeholders

(1) The stakeholders in the capital market are mainly shareholders and creditors;

(2) The stakeholders in the product market are mainly customers and suppliers;

(3) The stakeholders in the enterprise are mainly managers and ordinary employees;

(4) The stakeholders who are not bound by the contract include the community, government, media and natural environment where the enterprise is located.

3. The influence of stakeholders on enterprise goals

Property management, at least pay attention to several aspects:

(1) It is the most basic social responsibility of property management to ensure the management and use safety of buildings, facilities and equipment.

(2) Property management, especially residential property management, is inextricably linked with the government's community management and community service. In addition to assisting relevant departments, property service enterprises can also take the initiative in community cultural activities to create a more harmonious customer relationship and find more potential customer needs through community cultural activities. In this way, it not only relieves the worries of the government, but also helps to realize the long-term goals of the enterprise.

(3) Employees of property service companies, especially grassroots employees, come from all corners of the country and have different educational levels. Helping grass-roots employees of enterprises to integrate into the city, treat their relationship with customers with a positive attitude, understand the management mode and methods of enterprises, live in the city healthily and optimistically, and even further promote the development of their hometown, which is not only conducive to improving service quality and achieving enterprise goals, but also a social responsibility that enterprises undertake for these employees.

(4) Do a good job in environmental protection. For example, through technological transformation, energy conservation and emission reduction can be achieved.

Three. Property financial accounting report

(1) Financial and accounting reports

Financial management is inseparable from financial accounting reports. Financial accounting report refers to a document provided by an enterprise that reflects the financial status of the enterprise on a specific date and the accounting information such as operating results and cash flow during an accounting period.

Financial accounting report consists of accounting statements, notes to accounting statements and financial statements.

Accounting statements should at least include balance sheet, income statement, cash flow statement and other statements; The accounting statements prepared by small enterprises may not include the cash flow statement.

(2) Accounting statements

There are many forms of enterprise accounting statements, among which three basic financial statements are: balance sheet, income statement and cash flow statement.

1. Balance Sheet

Balance sheet refers to an accounting statement that reflects the financial position of an enterprise on a specific date.

Assets = liabilities+owners' equity

The financial information disclosed in the balance sheet mainly includes three aspects:

(1) Economic resources owned and available by the enterprise, including total assets, structure and distribution;

(2) Reveal the level and composition of the company's liabilities;

(3) explain the amount and composition of the owner's equity of the enterprise;

(4) It is helpful to reveal the changing information of the enterprise's financial situation.

2. Income statement

The income statement, also known as the income statement, refers to an accounting statement that reflects the operating results of an enterprise in a certain accounting period.

The income statement reflects the income, corresponding expenses, costs and final profit and loss of an enterprise in a certain period of time. Through the analysis of the income statement, we can understand the following contents:

(1) Profit and loss of an enterprise in a certain period.

(2) The causes and composition of enterprise profit and loss.

(3) It is helpful to evaluate the profitability of enterprises.

3. Cash flow statement

Cash flow statement refers to an accounting statement that reflects the inflow and outflow of cash and cash equivalents in a certain accounting period.

Through the analysis of the cash flow statement, we can understand the following contents:

(1) The source and destination of corporate cash, and the changes of corporate cash.

(2) The composition of enterprise cash flow.

(3) What is the net cash flow of the enterprise?

(c) Analysis of financial statements

In financial management, financial statement data are often transformed into useful information to help users make decisions, which is financial statement analysis.

1. User of enterprise financial statements

The users of the company's financial statements generally include equity investors, creditors, managers, suppliers, customers, governments, certified public accountants, etc.

2. The content of financial statement analysis

Modern financial statement analysis generally includes four parts: strategic analysis, accounting analysis, financial analysis and prospect analysis.

The purpose of strategic analysis is to determine the main profit sources, business risks and qualitatively evaluate the profitability of enterprises, including macro-analysis, industry analysis and enterprise competitive strategy analysis.

The purpose of accounting analysis is to evaluate the extent to which enterprise accounting reflects the basic economic reality, including evaluating the flexibility and appropriateness of enterprise accounting and correcting accounting data.

The purpose of financial analysis is to use financial data to evaluate the current and past performance of enterprises and evaluate their sustainability, including ratio analysis and cash flow analysis.

The purpose of prospect analysis is to predict the future of an enterprise, including financial statement prediction and enterprise valuation.

3. Financial analysis methods

The commonly used method in financial analysis is comparative analysis. Comparative analysis can be compared with the history of this enterprise, with similar enterprises and with the planned budget.

There are three main objects of comparative analysis: (1) comparing the total amount of accounting elements, such as the total amount of changes in total assets, net assets and net profit; (2) Comparative structural percentage, such as the proportion of each item in the income statement; (3) Compare various financial ratios, such as asset-liability ratio and accounts receivable turnover rate.

Note: the average level of the same industry may not be of reference value to this enterprise. The increase in profits does not necessarily mean the advanced management level, and the decrease in income does not necessarily mean the wrong decision.

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