Research on Financial Strategy Based on Cash Flow

Take Listed Companies in the Steel Industry in China as an Example

DOI

10.2991/assehr.k.210121.157How to use a DOI?

Keywords

Capital status, Sustainable growth rate, Sales growth rate, Cash flow

Abstract

With the continuous development and progress of China’s economy aiming at high quality, domestic enterprises are aware of the defects of traditional profit indicators and gradually implement the concept of “cash is king”. Realizing the defects of traditional profit indicators, it is necessary to analyse the capital structure and cost from the dynamic of cash flow. so improving the capital structure and reducing the cost of capital ensure that the financial strategy of enterprises adapts to the changes in the internal and external market environment. This paper measures the company’s capital level from cash flow, selects 37 listed companies in the steel industry as research objects, and analyses the status of listed companies from the financial strategy. According to the listed company’s annual financial data, capital status measured by the Grand Strategy Matrix are close to the reality of the company’s objective state. 90% of the company is in a state of shortage of funds, the actual sales growth rate is high. There will be cash gaps if growth continues. Finally, this paper begins with improving the sustainable growth rate to change the operation, investment, financing and dividend distribution strategy. It fully verifies the scientific of the financial strategy matrix to measure the state of funds of the company, and inspires how to identify potential problems in the enterprise through the cash flow situation and control the business growth rationalily.

Copyright

© 2021, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Haoyu Wang
PY  - 2021
DA  - 2021/01/23
TI  - Research on Financial Strategy Based on Cash Flow
BT  - Proceedings of the 6th Annual International Conference on Social Science and Contemporary Humanity Development (SSCHD 2020)
PB  - Atlantis Press
SP  - 800
EP  - 805
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.210121.157
DO  - 10.2991/assehr.k.210121.157
ID  - Wang2021
ER  -