At that time, the western society was in the embryonic period of capitalism, and many commercial cities along the Mediterranean coast appeared commercial organizations with public shares. Shareholders of stocks are businessmen, princes, ministers and citizens.
The development of commodity joint-stock economy objectively requires enterprises to reasonably predict the demand for funds and effectively raise funds.
But at this time, the demand for funds by enterprises is not great, and the financing channels and methods are relatively simple. The financing activities of enterprises are only attached to business management, and there is no independent financial management major. This situation lasted until the end of 19 and the beginning of the 20th century.
19 At the end of the 20th century, the success of the industrial revolution promoted the continuous expansion of enterprise scale, the remarkable improvement of production technology and the further development of industrial and commercial activities. The joint-stock company developed rapidly and gradually became the dominant enterprise organization form.
The development of joint-stock companies not only caused the expansion of capital demand, but also greatly changed the channels and methods of financing, and the financing activities of enterprises were further strengthened. How to raise capital to expand business has become the focus of most enterprises.
As a result, many companies have set up a new management department-financial management department, and financial management has begun to be separated from enterprise management and become an independent management profession.
At that time, the function of enterprise financial management was mainly to predict the amount of funds needed by enterprises and raise the funds needed by enterprises, and financing was the fundamental task of theoretical research on enterprise financial management at that time.
So this period is called financing period or financing period.
The research focus of this period is financing.
The main financial research achievements are as follows: 1897, American financial scholar Green published Corporate Finance, which elaborated on the issue of raising corporate capital in detail. This book is considered as one of the earliest financial works; 19 10 Mead published "Corporate Finance", which mainly studies how enterprises can raise capital most effectively. This book laid the foundation for modern financial theory.
/kloc-the world economic crisis that broke out in 0/929 and the overall depression of the western economy in the 1930s led to the bankruptcy of many enterprises and serious losses for investors.
In order to protect the interests of investors, western countries have strengthened the legal management of the securities market.
For example, the United States promulgated the Federal Securities Law and the Securities Exchange Law of 1933 and 1934, which made strict legal provisions on the company's securities financing.
At this time, the outstanding problems faced by financial management are the financial market system and related laws and regulations.
Financial management first studies and explains all kinds of laws and regulations, guides enterprises to form and merge companies according to the requirements stipulated by law, and issues securities to raise capital.
Therefore, western financiers call this period "law-abiding financial management period" or "descriptive legal period".
The research focus of this period is laws and regulations and internal control of enterprises.
The main financial research achievements are as follows: "Enterprise Finance" written by W.H.Lough of the United States puts forward for the first time that enterprise finance should not only raise capital, but also effectively manage capital turnover.
British T.G.Rose's internal financial theory especially emphasizes the importance of internal financial management, and holds that the effective use of capital is the focus of financial research.
After the 1930s, the focus of financial management began to shift from expansionary external financing to defensive internal capital control, and the determination of various financial objectives and budgets, debt restructuring, asset evaluation, and maintaining solvency began to become important contents of financial management research in this period.
After 1950s, faced with fierce market competition and the emergence of buyer's market trend, financial managers generally realized that simply expanding financing scale and increasing product output could not meet the development needs of the new situation. The main task of the financial manager should be to solve the problem of capital utilization efficiency, and the financial decision within the company has risen to the most important issue. Western financiers call this period "internal decision-making period".
During this period, the time value of funds has aroused the general concern of financial managers, and the capital budgeting method with fixed assets investment decision as the research object has become increasingly mature. The focus of financial management has shifted from paying attention to external financing to paying attention to the rational allocation of funds within the company, which has made a qualitative leap in the company's financial management.
Because asset management has become the top priority of financial management in this period, it is called asset financial management period.
At the end of 1950s, paying attention to and studying the overall value of a company was another remarkable development of financial management theory.
In practice, investors and creditors usually determine the value of the company's stocks and bonds according to a series of factors such as the company's profitability, capital structure, dividend policy and operational risk.
Therefore, the research on capital structure and dividend policy is highly valued.
The main financial research achievements in this period are as follows: 195 1 year, Joel Dean, an American financier, published the earliest theoretical works on investment finance, which played a decisive role in the rapid development of financial management from financing financial management to asset financial management; 1952, H.M.Markowitz published the paper "Portfolio Selection", and thought that under some reasonable assumptions, the variance of investment return rate is an effective method to measure investment risk.
From this basic point of view, from 65438 to 0959, markowitz published the monograph "Portfolio Selection" to study the portfolio problem among various assets from the measurement of returns and risks.
Markowitz is also recognized as the founder of modern portfolio theory school; 1958, Franco Modigliani and Merto H. Miller published the Theory of Capital Cost, Corporate Finance and Investment in American Economic Review, and put forward the famous MM theory.
Modig Lenny and Miller won the Nobel Prize in Economics in 1985 and 1990 respectively for their outstanding achievements in studying the theory of capital structure. 1964, William Sharpe and lintner put forward the famous CAPM based on Markowitz theory.
This paper systematically expounds the relationship between risk and return in asset portfolio, distinguishes systematic risk from non-systematic risk, and clearly puts forward the viewpoint that non-systematic risk can be reduced by diversifying investment.
The capital asset pricing model revolutionized the modern portfolio theory, so Sharp and markowitz shared the honor of the 22nd Nobel Prize in Economics.
In a word, during this period, a "new financial theory" was formed, which mainly studied financial decision-making. Its essence is to attach importance to the pre-control of financial management, emphasize the close relationship between the company and its economic environment, and take asset management decision as the center, which has pushed the financial management theory forward a big step.
Since the end of World War II, with the rapid development of science and technology, the speed of product upgrading, the rapid expansion of the international market, the increase of multinational companies, the prosperity of the financial market, the more complicated market environment and the increasing investment risks, enterprises must pay more attention to investment benefits and avoid investment risks, which puts forward higher requirements for existing financial management.
After the mid-1960s, the focus of financial management shifted to investment, so it was called the investment and financial management period.
As mentioned above, portfolio theory and capital asset pricing model reveal the relationship between asset risk and its expected rate of return, which is welcomed by the investment community.
It not only bases the securities pricing on the interaction between risk and return, but also greatly changes the company's asset selection strategy and investment strategy, and is widely used in the company's capital budget decision.
As a result, two independent fields in finance-investment and corporate financial management are combined, and the theory of corporate financial management has entered a new era of investment financial management.
The above-mentioned financial research achievements in the asset management period are also the main financial achievements in the primary stage of investment and financial management.
Since 1970s, the innovation of financial instruments has strengthened the connection between companies and financial markets.
Warrants and financial futures are widely used in enterprise financing and foreign investment activities, which promotes the development and perfection of financial management theory.
In the mid-1970s, Blake and others established the option pricing model (OPM). Stephen ross put forward the arbitrage pricing theory.
During this period, modern management science makes the investment management theory mature day by day, which is mainly manifested in: establishing reasonable investment decision-making procedures; A perfect investment decision-making index system has been formed; A set of scientific decision-making methods for venture capital is established.
It is generally believed that the 1970s was the period when western financial management theory came to maturity.
Because of absorbing the rich achievements of natural science and social science, financial management has further developed into a management activity integrating financial forecasting, financial decision-making, financial planning, financial control and financial analysis, with fund-raising management, investment management, working capital management and profit distribution management as the main contents, occupying a core position in enterprise management.
1972, Fama and Miller published the book Financial Management, which is a representative work of western financial management theory and marks the maturity of western financial management theory.
At the end of 1970s, the financial management of enterprises entered a new period of deepening development, developing towards internationalization, accuracy, computerization and networking.
In the late 1970s and early 1980s, the western world generally suffered from long-term inflation.
Large-scale sustained inflation leads to the rapid increase of capital occupation, the increase of financing cost with interest rate, the depreciation of securities, the more difficult for enterprises to raise funds, the inflated profits of the company and the serious loss of funds.
Serious inflation has brought a series of unprecedented problems to financial management, so the task of financial management in this period is mainly to deal with inflation.
The financial management of inflation once became a hot issue.
Since the middle and late 1980s, import and export trade financing, foreign exchange risk management, international transfer price issues, international investment analysis, and financial performance evaluation of multinational companies have become hot spots in financial management research, and a new branch of finance-international financial management has emerged.
International financial management has become a branch of modern finance.
In the middle and late 1980s, developing countries in Latin America, Africa and Southeast Asia fell into a heavy debt crisis. The political situation in the former Soviet Union and Eastern European countries was turbulent and their economies were on the verge of collapse. The United States has a trade deficit and a fiscal deficit, and trade protectionism once prevailed.
This series of events led to the turmoil in the international financial market, which made the investment and financing environment faced by enterprises very uncertain.
Therefore, enterprises pay more and more attention to the evaluation and avoidance of financial risks in financial decision-making. Therefore, quantitative methods such as utility theory, linear programming, game theory, probability distribution and simulation technology are increasingly applied to financial management.
Attach great importance to financial risks and the quantification of financial forecasts and decisions.
With the application of advanced methods and means such as mathematical methods, applied statistics, optimization theory and electronic computer in financial management, the company's financial management theory has undergone a "revolution".
Financial analysis is developing rapidly in a precise direction.
Financial management information system was born in 1980s.
Since the mid-1990s, computer technology, electronic communication technology and network technology have developed rapidly.
A great revolution in financial management-online financial management has quietly arrived.