From the perspective of development, capital is a scarce resource for every enterprise, and the production and operation, capital operation and long-term development of enterprises are inseparable from capital all the time. Therefore, how to effectively carry out financing has become an extremely important basic activity of enterprise financial management department. Although the basic purpose of enterprise financing is to maintain and develop its own production and capital management, every specific financing activity is usually driven by specific motives. For example, enterprises need financing for the capital turnover and temporary needs of normal production and operation; Enterprises raise funds for purchasing equipment, expanding scale, introducing new technologies and developing new products; Foreign investment and merger financing of enterprises; Enterprise financing is to repay debts and adjust capital structure. No matter what the motivation is, the financial personnel of the enterprise must carefully analyze and evaluate the various factors that affect the financing, and strive to make the financing activities achieve the highest efficiency and the best comprehensive economic benefits within their power. We know that the financing activities of enterprises come from investment demand. Of course, the investment mentioned here includes current assets investment, fixed assets investment and indirect investment in the capital market. Whether to carry out financing activities is mainly determined by comparing investment income and capital cost. For example, what is the average annual rate of return (or average annual profit rate) of investment projects in the future? What is the cost (or capital cost rate) of funds occupied by financing activities? This is the most concerned by the decision-making level of enterprise management. Therefore, before financing activities, enterprise financial personnel must make a reliable prediction of future investment income. Only when the investment income is far greater than the cost of capital can the financing activities be determined to be reasonable and meaningful. When the investment direction is determined, the next thing to do is to estimate the investment quantity, because the investment quantity determines the financing quantity. How to estimate the investment, although there are various calculation methods, is not the purpose of this paper. As corporate finance personnel, no matter what channels and ways to raise funds, we must carefully estimate the amount of funds needed in advance. Only in this way can the amount of financing and investment be balanced with each other, so as to avoid that insufficient financing will affect the investment effect of enterprises or excessive financing will reduce the efficiency of funds. Once the capital demand is determined, enterprises should make full use of internal sources of funds before considering external financing. The so-called internal capital sources of enterprises are nothing more than cash sources formed through depreciation and capital sources increased through retained profits. This part of the funds is "naturally" formed within the enterprise. Although it is occupied, the use cost of funds (in fact, non-cash) will also occur, but the financing cost should not be paid. External financing refers to the sources of funds formed through external integration when internal financing cannot meet the needs of enterprises, including debt financing forms such as bank loans, bond issuance, financial leasing and commercial credit, as well as equity financing forms such as absorbing direct investment and issuing stocks. Taking up the externally integrated funds will not only generate the use cost, but also pay the financing cost. Therefore, the cost of using external financing is relatively high. The real financing activity of an enterprise is to integrate funds from the outside, and the real financing quantity is the total amount of funds integrated from the outside. Because the financing channels and methods of enterprises are various, the difficulty, capital cost and financial risk of different financing channels and methods are also different. Since it is necessary to integrate funds from the outside, enterprises must consider maintaining a good and reasonable financial structure and capital structure after financing, so as to keep financial risks at a safe level and reduce the comprehensive capital cost. Under this overall financing strategy, several financing schemes are designed, and their financial advantages and disadvantages are sorted in order to implement dynamic optimization in specific financing practice. Of course, the overall financing strategy must be combined with the specific financing practice. For example, according to general financial theory, the cost of equity financing is higher than that of debt financing. Therefore, enterprises in developed countries always pay attention to debt financing in order to reduce the comprehensive capital cost within the fluctuation range allowed by financial risks. In China's capital market, the situation is different until now and for some time to come. Because most enterprises in China are generally inefficient, investors' expectations for returns are generally low. Moreover, the empirical research in financial circles at home and abroad has not proved that the financing cost of China's enterprise equity funds is higher than that of debt funds. In fact, as long as we notice that most enterprises in China are generally inefficient, with high asset-liability ratio and great financial risks and pressures, enterprises should know how to raise funds abroad. The ways of equity financing mainly include absorbing direct investment and issuing stocks. For enterprises that adopt the financing method of absorbing direct investment, equity investors should be required to directly inject cash as much as possible to avoid direct investment at the price of physical objects, so as to make full use of funds. For enterprises that adopt the financing method of issuing shares, the demand for new shares has been in short supply due to the profiteering effect of issuing new shares in China stock market. Therefore, there is no risk for enterprises that raise funds by issuing stocks. Moreover, most of the listed companies in China pay little dividends to shareholders every year, so it is conceivable that the cost of using equity funds by enterprises is certainly not high. Last year, a new way of equity financing appeared in China stock market, namely issuing new shares. Due to the relaxed conditions for issuing new shares made by the management based on the projects invested by listed companies and their development direction, many enterprises with average operating performance, poor financial situation, long-term lack of rights issue qualification and capital shortage have obtained excellent opportunities to adopt equity financing. They put forward investment projects in line with the industrial direction advocated, encouraged and cultivated by the state, and on this basis, as the beginning of new ventures, they obtained the qualification for issuing new shares and realized the equity financing plan. Therefore, according to the specific situation of financing in China, as long as the enterprise's own operating performance, financial situation, market reputation and industry development prospects allow, and the external environment is more favorable, equity financing should be adopted as far as possible. Enterprises will not only have great freedom in the use of funds, but also effectively avoid financial risks, make the capital structure more stable and help enhance the competitiveness of enterprises. At the same time, the cost of capital is not necessarily high, so why not do it for enterprises? Of course, it is relatively more difficult to adopt the financing method of equity capital, which requires not only a lot of work, but also a long time and process to obtain funds. But for enterprises that have good investment projects and need funds, equity financing, especially stock financing, must not be abandoned. Although it is extremely beneficial to enterprises in equity financing, it is difficult to adopt this method, including declaration, approval and implementation, which requires a lot of time, financial resources and manpower. Therefore, as long as the return on total assets of the enterprise is higher than the debt interest rate, the product sales are smooth, and the financial structure and capital structure are reasonable, the enterprise should adopt debt financing. In this way, enterprises can not only fully enjoy the financial leverage benefits brought by debt management within a safe financial risk range, but also ensure the rapid growth of owners' rights and interests. It is worth noting that there will be restrictions on the number and time for any enterprise to use debt financing. That is to say, the creditor will decide whether to finance, the amount and duration of financing only after fully evaluating the assets, operation and financial status of the enterprise applying for debt financing. At this time, we should clearly see that whether an enterprise can obtain financing from the loan market depends on its own conditions (including production and operation, business reputation and solvency, etc.). ) It is extremely important that creditors in the lending market cannot be philanthropists. In order to effectively obtain financing from the loan market, the cultivation of the enterprise's own quality and the shaping of its external image should not be underestimated. Once an enterprise has the conditions for debt financing, it should enter the lending market for effective debt financing. At this time, the focus of the financial management department is how to choose the financing method to achieve the financing goal with lower capital cost and as low financial risk as possible. Generally speaking, for the demand for working capital loans generated by short-term operations, enterprises should try to adopt commercial credit methods such as credit purchase to reduce the borrowing amount of short-term funds. For short-term funds that must be borrowed from outside, enterprises should make a debt repayment plan on the basis of prudent cash budget, and then obtain short-term financing (such as credit line and revolving credit agreement) at relatively favorable interest rates. ), and shall not rashly carry out short-term financing, and pay short-term debt through high-cost and high-risk long-term financing when the debt cannot be repaid at maturity. In this way, it will inevitably lead to the deterioration of the financial situation of enterprises and the increase of financial risks. For the long-term capital borrowing demand generated by production and capital operation, enterprises must make full use of internal sources of funds, take lower capital cost and lowest financial risk as financing objectives, and treat them under specific circumstances. For example, when an enterprise needs to invest in purchasing equipment and expanding production scale, the management should first consider the length of the replacement cycle of the purchased equipment.