A summary of the development of financial management objectives
According to the available data, the financial management objectives are mainly as follows:
(1) Maximize profits. This goal was formed and developed at the beginning of19th century, and its origin was Adam? Smith's theory of enterprise profit maximization. Some scholars have clearly pointed out that "it is an objective choice to take profit maximization as the overall goal of enterprise financial management" (He Qingbo, Xing Jianping, 1998), and "the complete statement of the management goal of state-owned enterprises should be: to pursue profit maximization on the basis of fulfilling enough social responsibilities" (Qi, 1999). It is reasonable to maximize profits as the goal of financial management. On the one hand, profit is the source of enterprise accumulation, and the maximization of profit gives enterprises a reliable source of working capital; On the other hand, profit maximization not only satisfies the owner to increase private wealth, but also maximizes social wealth. However, with the development of commodity economy, the organizational form and management mode of enterprises have undergone profound changes, and the owner's management has gradually been replaced by the employee's manager's management, and the interests of enterprises are diversified. In this case, it is not appropriate to maximize profits as the financial management goal of enterprises. This is not only because the concept of profit maximization is vague and cannot reflect the proportional relationship between profit and invested capital, but also because even if profit maximization is realized, if the reasonable interests of various stakeholders are not considered, the source of future enterprise capital will be affected.
(2) Maximize the net present value. In the late 1940s, western financial circles began to pay attention to the effective distribution of capital within enterprises and the role of enterprises in the capital market. And 195 1 Joel? With the publication of JoelDean's capital budget, financial circles began to discuss how to allocate property resources among various assets to improve the net present value of cash flow. If the net present value of all investment projects of an enterprise is the largest, the net income of the enterprise will be the largest. Capital can truly maximize its value-added. Therefore, taking the maximization of present value as the financial management goal of the enterprise at that time, considering the influence of time value on the effect of capital appreciation, is obviously superior to the profit maximization goal, but fundamentally overcomes the defects of the profit maximization goal.
(3) Maximize earnings per share. In the 1960s, with the gradual improvement of the capital market and the continuous development of joint-stock enterprises, the maximization of earnings per share has gradually become the financial management goal of western enterprises, which is a further step in science, because the concept of "earnings" here has the concept of time, and "per share" has the concept of invested capital, that is, the income obtained by units investing capital (per share, not per yuan) in a certain period of time. Second, the dividend policy of companies has not been considered. If the enterprise's goal is only to maximize earnings per share, then the enterprise will never pay dividends.
(4) Maximize shareholders' wealth. This is a popular view in western financial management in recent years. The maximization of shareholders' wealth is measured by the market price of the company's stock, in which risk factors are considered. Because the level of risk will have an important impact on the stock price; It also considers the time value of money, which can overcome the short-term behavior of enterprises in pursuing profits to some extent. Because both the current profit and the expected future profit will have an important impact on the stock price. However, this view also has its shortcomings. First of all, emphasizing the interests of shareholders and not paying enough attention to the interests of other related subjects of enterprises is not conducive to dealing with various financial relations arising from modern enterprise financial activities. Secondly, stock price is the result of many factors, not all of which can be controlled by the company, and it is unreasonable to introduce uncontrollable factors into financial management objectives. Thirdly, it is only suitable for listed companies, and it is difficult for non-listed companies to adapt.
(5) Maximize enterprise value. The so-called enterprise value is the market value of enterprise assets, which depends on the potential and future profitability of the enterprise. The maximization of enterprise value fully considers the influence of time value, risk value and inflation value of funds on enterprise assets, and overcomes the short-term behavior of enterprises in pursuing profits. Therefore, some scholars believe that this view reflects a profound understanding of economic benefits, "it is the optimal goal of modern financial management" (Jingxin, Liu Junyan, 1998). However, this view has been criticized: First, the concept is vague. Most scholars believe that "the maximization of enterprise value is the maximization of shareholders' wealth" (Liu Guisheng et al., 1997). However, some scholars believe that enterprise value and shareholder wealth are not the same concept. "Enterprise value is equivalent to the asset value on the left side of the balance sheet", while shareholder wealth should be "equivalent to the owner's equity value on the right side of the balance sheet" (Wang Qingcheng, 1999). The second is the difficulty of calculation. If the discounted value of future enterprise salary is used to measure the enterprise value, it is "quite reasonable in theory, but there are insurmountable defects in practice". Although the method is scientific, "asset evaluation is usually used in enterprise management mode, asset flow and property right change, which is time-consuming and laborious in daily management and performance evaluation of enterprises, and it is actually difficult to be effective".
Wang Qingcheng, 1999.
(6) Maximize the owner's wealth. This view holds that "under the condition of socialist market economy, the financial management goal of Chinese enterprises should be expressed as the maximization of owners' finance" (Guo Fuchu et al., 1997). In China's state-owned economic reform, the concept of owner has been accepted by everyone. For joint-stock enterprises, shareholders are the owners of enterprises, while for non-joint-stock enterprises, investors are the owners of enterprises. Owners' evaluation criteria for enterprises are mainly whether their wealth can be maximized, so the maximization of owners' wealth will inevitably become the goal of financial management. It is not only in the interests of the economic parties of the enterprise other than the owners, but also in the interests of the whole society.
(7) Rationalization of capital movement. This view holds that the goal of enterprise financial management should be to realize the rationalization of enterprise capital movement. (Wang Xiaode, Yang Dan, 1994) The rationalization of capital movement is based on improving the efficiency of capital use, and through controlling all aspects of enterprise financing, investment, consumption, income and distribution, and effectively managing various asset forms of enterprises, the use of funds can reach a relatively adaptive and reasonable state. Its basic content is to realize the scientific unification and coordination of enterprise capital flow, security and profitability. The defects of this view are: first, the goal itself cannot be directly quantified, such as the maximization of profit, the maximization of shareholders' wealth and the maximization of enterprise value, which are all quantitative financial management goals, and it is difficult to quantify the optimization goal of capital movement; Second, capital movement is a series of behavioral processes such as fund-raising, investment and distribution, and the optimization of capital movement is the optimization of enterprise financial process, which still does not answer what is the ultimate goal of financial management.
(8) Maximize the ability of sustainable development. Some scholars put forward that the goal of enterprise financial management should be to maximize the ability of sustainable development (Li Duansheng, Li, 1998). This view holds that the financial management goal of an enterprise must be a high degree of unity of economic goals and super-economic goals, and it is the best consideration for the interests of owners and other subjects. It can't just be a very specific, quantitative and obviously tendentious financial index. It must be comprehensive and compatible, which can fully reflect the sustainable operation and stable development ability of enterprises. The financial management goal conducive to the sustainable development of enterprises is to maximize the sustainable development ability. The author believes that the merits of this view are as follows: first, the highest goal of enterprise management can be fully considered in financial management objectives; Second, make the financial thinking of enterprises jump out of the limitations of fund management. Its shortcoming is that the maximization of enterprise's sustainable development ability is a comprehensive enterprise goal, which cannot be covered by enterprise financial management goal. "Maximizing the ability of sustainable development" is essentially the highest goal of enterprise management, and the financial management goal of an enterprise should fully reflect the business goal of the enterprise, but the two cannot be equal.
(EVA maximization. This view holds that the goal of enterprise financial management should be to maximize EVA (Ai Zhiqun, 2002). EVA is the difference between the company's operating profit and the cost of capital. It is a measure of the economic profit of an enterprise after the profit in a certain year offsets the opportunity cost of capital. The financial management goal of EVA maximization can closely link the owner's financial management goal with the operator's financial management goal. Owners mainly reward operators based on the growth of enterprise EVA, and properly handle the agency conflict between operators and shareholders. EVA takes into account the cost of all the capital invested by the enterprise, which is conducive to the operators to do everything possible to improve the effect of capital operation and give them greater flexibility; The essence of EVA maximization is to maximize the economic profit of enterprises, and also to maximize the wealth of shareholders under the balance of interests of operators. However, the disadvantage of this view is that paying too much attention to EVA can easily make enterprises ignore the main interests of other contractual relationships and the sense of social responsibility of enterprises.
In addition to the above nine financial management objectives, the theoretical circle has also constantly put forward new opinions. If some scholars put forward the goal of maximizing the profit rate of equity capital to measure the goal of maximizing shareholders' wealth (Wang Qingcheng,1999); Some scholars put forward that the goal of enterprise financial management should be expressed as: to maximize the enterprise value as the main goal, and it is composed of a series of auxiliary goals such as social responsibility, value-added amount and optimal utility (Zhang Tao,1999); Some scholars put forward that "the short-term behavior of financial activities can only be overcome if financial decision-making aims at maximizing long-term capital appreciation" (Lu,1996); Some scholars put forward "maximizing the interests of investors, operators and society" (Zhu,1996); Some scholars have suggested that the financial management goal of enterprises should be hierarchical, and its fundamental goal is capital appreciation; The direct goal is profit; The core goal is economic benefit (Zhang Xianzhi,1997); Some scholars have suggested that the financial management goal of an enterprise should pursue the maximization of effective value-added and the coordination of related interests on the premise of fulfilling social responsibilities (Zhang Zhuo, Cheng Kai and Mingran Deng, 2002).
Second, the study of financial management objectives should be taken seriously.
(A) the starting point of the study of financial management objectives
From the above analysis, we can see that the starting point of financial management objectives can be summarized into two ways. The first view is that the goal of financial management is the goal of enterprise owners. Therefore, the goal of financial management should be "maximization of owner's wealth", "maximization of EVA", "rationalization of capital movement" and "long-term capital appreciation" The second view is that the residual claim of an enterprise should be held by all stakeholders, including shareholders, creditors, operators, employees, the government and the public. Therefore, the goal of financial management should be "maximizing the value of enterprises", "maximizing the interests of stakeholders" and "maximizing the interests of investors, operators and society". This difference is essentially the difference between the two enterprise views. One is the "owner concept", which holds that an enterprise is the owner's enterprise; The second is the "entity view", which holds that an enterprise has a personality independent of the owner. From the perspective of financial environment and economic theory, "entity concept" is more in line with the actual situation of modern society. First of all, the developed capital market has the characteristics of scattered investment subjects and diversified investment purposes. Secondly, the core of establishing a modern enterprise system is to clarify the relationship of property rights, that is, to distinguish the ownership of investors from the property rights of legal persons and promote the separation of the two, which requires confirming the dominant position of enterprises. Thirdly, modern economics believes that an enterprise is a contract between a series of production factors. Some commentators pointed out that capital ownership and enterprise ownership should not be confused, and it is important to eliminate the deep-rooted concept that enterprises are owned by securities holders. This can be said to be the economic basis of "entity concept". Finally, the future society will be a knowledge economy society. Besides debt capital and equity capital, there are other forms of capital, such as human capital and knowledge capital. In some enterprises, these have become part of the accounting system. So the concept of "entity" is more in line with the development trend of today's times.
(B) the structure of financial management objectives
Some commentators have suggested that the financial management goal is single. Even if the financial management objectives are hierarchical and diversified, they are also different in specific formulation. For example: ① Financial management objectives can be divided into general objectives and sub-objectives according to different scope, and the latter includes fund-raising management objectives, investment management objectives and operation management objectives. ② Financial management objectives are divided into basic objectives and specific objectives, while the former is divided into economic objectives and social objectives. ③ Financial management objectives should be divided into owner's financial management objectives and operator's financial management objectives, the latter being "the pursuit of personal utility maximization". The fundamental goal is capital appreciation, the direct goal is profit, and the core goal is economic benefit.
The author believes that, firstly, financial management objectives usually refer to the financial management objectives of enterprises, and there is no need to divide financial management objectives according to financial subjects. Second, financial management objectives have hierarchical characteristics, and sub-objectives or specific objectives are the means to achieve overall or basic financial objectives. Third, the overall financial goal should start from the "entity concept" and consider the interests of all stakeholders. Fourthly, when the economic system, capital market, industry and organizational form of an enterprise are different, the stakeholders who can really influence the financial management objectives are also different. such as
: under the planned economy system, government interests take precedence; When the capital market is underdeveloped, enterprises mainly rely on loans for financing, and creditors have a "say"; In high-tech and knowledge-based industries, human capital and knowledge capital are more important; In sole proprietorship and partnership enterprises, the operator and owner are often the same person, so it is much simpler to determine the financial management objectives. Therefore, it is necessary to deeply study the diversified characteristics of financial management objectives.
(C) evaluation indicators of financial management objectives
Some critics don't discuss the evaluation index of financial management objectives. This may be because they think that the financial management goal is not the calculation of indicators, which is not operable, or that the financial management goal is the "maximization" of "an indicator", so there is no need to discuss the evaluation indicators of financial management goals. The second disagreement about the evaluation indicators of financial management objectives is that some commentators think that there is only one such indicator, while most commentators who emphasize the structure of financial management objectives design multiple indicators. The third difference is which indicator (s) are used in the specific design of indicators.
The author believes that, first of all, financial management objectives are not direct evaluation indicators of financial management objectives. For example, marketing management aims at "customer satisfaction", and its evaluation index can be the number of quality complaints and the number of "repeat customers". Secondly, the evaluation index of financial management objectives is the quantitative expression of financial management objectives. Since the financial management goal has an internal structure, its evaluation index should also be a system. As for how to design, calculate and use these indicators, further research is needed.
Third, the development trend of enterprise financial management objectives research
We can see that the formulation of China's financial management objectives has gone through a process of constant repetition and change. Taking the development process from profit maximization to wealth maximization and then to enterprise value maximization as the main line, there are some viewpoints such as rationalization of capital flow, maximization of sustainable development ability and maximization of profit rate of equity capital. Now some people have put forward the view that maximizing the interests of stakeholders is the goal of enterprise financial management. Which one is more suitable for China enterprises remains to be tested by time. Many viewpoints in this issue show that the financial management objectives have attracted extensive attention from the theoretical and practical circles, and also show that the theoretical research on the financial management objectives of enterprises is not mature. Based on the present situation and looking forward to the future, the author believes that the research on the financial management objectives of enterprises by Chinese scholars mainly has the following major trends:
(1) "The goal of maximizing enterprise value" is the mainstream academic viewpoint at present, and many other new viewpoints are tinkering around the central point of maximizing enterprise value.
(2) Paying attention to coordinating the relevant interests of the subjects of multilateral financial relations is an important basis for establishing the financial management objectives of enterprises. The relevant stakeholders here include owners and operators, internal employees, creditors and other partners. Only when the interests of these stakeholders are fully considered can the financial management objectives be reasonable.
(C) pay attention to the introduction of social responsibility into the content of corporate financial management objectives. Although there is no clear discussion on how to embody social responsibility in corporate financial objectives, many scholars have begun to pay attention to social responsibility in corporate financial objectives. Some people think that taking social responsibility is the basic constraint to realize the financial management objectives of enterprises; Some people think that taking social responsibility is one of the goals of corporate finance and so on. It can be concluded that social responsibility and social interests must be considered in the future financial management objectives of enterprises.
(D) In establishing the financial management objectives of enterprises, we should pay more attention to the long-term interests of enterprises. Scholars' criticism of financial management goals such as profit maximization reflects scholars' expectation that financial management goals that easily lead to short-term business behavior of enterprises are not good goals. Therefore, scholars' research results try to establish a financial management goal that is conducive to the long-term development of enterprises. In such a financial management goal, the time value of funds, the risk value of operations and long-term benefits are reflected.
(V) Distinguishing the financial management objectives of different types of enterprises will become one of the research trends in this field. In the current research in China, some scholars began to discuss the financial objectives of small and medium-sized enterprises, loss-making enterprises, high-tech enterprises, listed companies and unlisted enterprises. It reveals a research trend: the goal of enterprise financial management is gradually deepening and developing towards concreteness. It should be said that this research idea is correct, and it will effectively promote the demonstration and pertinence of the research on enterprise financial management objectives. At the same time, the enterprise financial management objectives may be further decomposed within the enterprise, and the overall financial objectives will be specifically implemented to the financial management objectives of managers at all levels.
References:
Literature review of enterprise financial management objectives