The hottest new choice for corporate finance money

As the main body of social economy, the behavior of enterprises has attracted more and more attention. When an enterprise is engaged in its main business, how to increase revenue and reduce expenditure, reduce costs, and increase asset income has become a problem for enterprise decision-makers. When an enterprise has a large amount of capital and is unable to find a better investment project, the general choice is to deposit it in the bank for a rainy day. This choice of enterprises is understandable, but on the premise of pursuing the maximization of interests, does the enterprise have a better choice? At this time, corporate finance was born. Enterprise financial management refers to the behavior that an enterprise invests idle funds in stocks, bonds, funds and other easily realizable assets, or hands over the funds to others in a short period of time, in order to obtain excess returns. However, for a long time, corporate finance has not been paid attention to

analysis of the reasons why enterprise financial management is not paid attention to

from the specific reality, the reasons why enterprise financial management is not paid attention to are: first, in the traditional concept, enterprises are positioned as production and operation, and other behaviors unrelated to operation are limited and unknown. Second, under the planned economic system, enterprises have a single financing channel, and many enterprises often face the dilemma of capital shortage. How can we talk about investing with surplus funds? Third, enterprises have high requirements for financial funds, such as low risk and good liquidity. In the past, there were few such investment varieties. Fourth, the enterprise lacks investment professionals and an objective and fair evaluation of the investment market. If the investment is wrong, it will bring great losses to the enterprise

with the gradual improvement of the socialist market economic system, great changes have taken place in the social positioning of enterprises. The loose policies, the widening of financing channels and the increase of financial derivatives have gradually strengthened the ability of enterprises to use funds. Enterprises aim to maximize their interests. When enterprises have a large amount of idle funds, it is possible to seek to exceed the income of bank deposits. Entrusted financial management was once popular in enterprise financial management. It is the behavior that securities companies operate the funds entrusted by enterprises and obtain profits. When it was first launched, it was favored by enterprises for its promised high yield and low risk. But with the increase of market risk, what are the functional characteristics of the hydraulic universal testing machine for aluminum alloy that securities companies violate? With the increasing regulation, many enterprises have been thrown into a bottomless pit of funds, and some even lost their money. This kind of financial management has also become a yellow flower yesterday, which has been criticized by everyone

what about other financial management methods? Bonds, with low risk but poor liquidity; Stock, with good liquidity but high risk; Foreign exchange, too professional. Is there a variety suitable for enterprise investment? The answer is yes, that is money market funds

money market fund is a kind of securities investment fund. The securities investment fund is a kind of collective securities investment mode of benefit sharing and risk sharing. Through the issuance of fund units, it concentrates the funds of investors, is entrusted by the fund custodian, is managed and operated by the fund manager, and is engaged in the investment of stocks, bonds and other financial instruments. Its characteristics are as follows: the unit face value of investment funds is low, which is 1 yuan in China; The management fee and purchase fee are low, which is conducive to absorbing social funds; The fund is managed by a fund management company and operated by experts, which is conducive to reducing risks and obtaining higher returns; To implement investment portfolio, the securities investment fund law stipulates that "fund managers should adopt the method of asset portfolio when using fund assets for securities investment." In this way, it is conducive to dispersing risks and ensuring the safety of investors' assets. Money market funds have all the characteristics of securities investment funds, but also have their own uniqueness

characteristics of money market funds

money market funds mainly have the following characteristics:

(1) money funds are similar to stock funds and bond funds, and they are a fund that invests in short-term marketable securities in the money market. Such as treasury bills, commercial bills, bank certificates of deposit, government short-term bonds, enterprise bonds and other securities, with high security

(2) money market funds can be subscribed and cashed at any time, with strong liquidity

(3) the face value of the money market fund is constant at 1 yuan, the income is reflected in the increase of its share, and the income is distributed daily, the fund share is carried forward monthly, and the compound interest is enjoyed

(4) the price of money market funds is still higher than that of trapezoidal screw, and they invest in treasury bonds, central bank bills, etc., with stable yields

(5) money market funds have no subscription fee and redemption fee, and the transaction handling fee is zero

(6) the income of money market funds is tax-free and 20% income tax is not paid

(7) the redemption funds arrive quickly. They are redeemed on t day. Generally, the funds can arrive on T 2 day

the history of money market funds

money market funds originated in the United States in 1971. Due to the interest rate discrimination against small depositors, money market funds came into being - to concentrate the funds of small depositors and appear in the financial market as large depositors. Ordinary investors cannot invest due to market access qualifications, asset size and other reasons, while money market funds have become a convenient way for institutional investors and individual investors to enter the money market. Through the collection of funds, it can carry out financial "wholesale" business, and strive for higher income in the inter-bank money market, and this income is very stable. Investors with a small amount of funds do not have cost advantages in the bond market, and will incur higher costs in terms of information, information or trading. The operation of a large number of funds through fund companies can effectively reduce costs and produce obvious economies of scale

since the birth of money market funds, the asset scale of global money market funds has expanded rapidly. By the end of 2004, the total assets of money market funds among the world's top 25 fund management companies reached $1.25 trillion, higher than the sum of bond funds and hybrid funds, ranking second in the global common fund market with a proportion of 25.11%. In many developed countries, it is almost the most important financial tool for families and enterprises

Table 1 data source: CCER China securities market database

fund types stock funds money market based bond funds hybrid funds

proportion 52.9% 25.1% 16.6% 5.4%

Table 2 Comparison of several investment methods

risk profitability liquidity security

bank deposits low low strong high

treasury bonds lowest medium weak highest

stocks high high strength lowest

money market funds low medium strong As can be seen from the above table, the profitability, risk, liquidity and safety of money market funds are very suitable for enterprises to invest. No wonder in western countries, money market funds have become a tool for enterprise cash management. Of course, low risk does not mean no risk. Investing idle funds in money market funds is not the same as depositing money in the bank. Any investment is risky. However, as of March 7, 2006, from the average of the total return of 12 money market funds that have operated for a year in the recent year of 2.24% (different impact experimental results will be obtained from wind information), the security and profitability of funds are very ideal. In September, 2004, China issued the Interim Provisions on the management of money market funds, which further strengthened the security of funds. It clearly stipulates that money market funds shall not invest in convertible bonds; In the national interbank bond market, the fund balance of bond repurchase shall not exceed 40% of the net asset value of the fund; The average remaining period of the portfolio shall not exceed 180 days. These regulations have strengthened the risk control of money market funds, highlighted the low-risk and high liquidity reliability of money market funds, and protected the interests of investors

for another example, it is also 10million yuan. If deposited in the bank, you can only enjoy the current interest rate of 0.72%, which is limited to one year, and the interest income is 72000 yuan; If you invest in money market funds, you can earn 200000 yuan a year at a yield of 2%, and enjoy current convenience

money market funds have good liquidity, low risk, convenient trading, no handling charges, strong liquidity, low par value, and are less affected by market risks. They are expert wealth management, compound interest appreciation, tax-free, and the yield can be comparable to one-year fixed deposits. It can be seen that investing in money market funds and managing cash assets of enterprises can not only obtain greater returns, but also ensure the safety of assets to the greatest extent. It is an ideal investment and financial management tool for enterprises