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Capital Structure Analysis of Listed Companies in China

Author: ChenSiMeng From: www.yourpaper.net Posted: 2010-01-25 01:50:16 Read:
Abstract: With China's listed companies is increasingly becoming an important part of China's economic indispensable, the number of listed companies is growing and expanding influence in the national economy, the situation on the capital structure of listed companies, not only conducive to the enterprise's own value maximize Research and Exploration held speed development of the national economy as a whole can be further deepen.
Keywords: listed companies' capital structure analysis
A capital structure research background and significance
Capital structure theory is an important part of the financial theory, it is not only significant financial issues involving corporate financial objectives, funding, financing costs and the cash flow of the enterprise, more important to have a significant impact on the corporate governance structure, incentive structure is the capital structure of the enterprise.
Since the reform and opening up, China's capital markets gradually improve, the scale of the business continues to expand and continuously improve the operating level, more and more companies have chosen listing through the issuance of stock financing. However, due to China's market economic system and the establishment of a long time, associated with the securities market is only 10 years of development history, in the capital structure of listed companies in China is still in its infancy. Increasing and expanding influence in the national economy, the number of listed companies with the listed companies in China is increasingly becoming an important part of China's economic operation indispensable research on the status of the capital structure of listed companies, not only conducive to the enterprise's own value maximize Research and Exploration held speed development of the national economy as a whole can be further deepen. Meanwhile, synchronization, improve and perfect our capital market system to promote domestic economic theory and international research has important implications.
2 affect the capital structure of the two factors
Influencing factors of capital structure is complicated, we can not fully analyze, so here we are based on the actual situation of China's listed companies, only in line with China's national conditions, obvious and the sphere of influence of two aspects, namely to understand the situation of the capital structure of listed companies in China from industry differences in firm size.
The 2.1 industry differences in the degree of industrial concentration also affect the level of the capital structure of the enterprise. The high concentration of the industry into a financial crisis, companies with high financial leverage is easy to launch a price war, due to low financial leverage of corporate marketing war.
Between the product life cycle and capital structure, due to the different stages of the life cycle of the product in which. Rich profits from the products manufacturer in the growth stage of the product, more to take internal financing means, and thus lower financial leverage will. , At different stages of enterprise according to their own products in which the corresponding stage capital structure decisions.
2.2 Company size companies of all sizes, and its capital structure is very different. Static tradeoff theory: the theory that the larger the scale, the more likely diversified way or vertical integration mode of operation, although not necessarily improve the level of profitability, but it can be dispersed operational risks, balancing the different periods of profit. In addition, large-scale enterprises can effectively schedule internal funds above the large enterprises than small businesses have a greater risk resilience. The company more debt, and therefore the larger the size of the company, the more easily choose liabilities. On the contrary, according to the theory of information asymmetry, large companies tend to equity financing, for the sake of the size of the company, the shareholders are not worried about the issue of the stock will weaken the company's influence, large companies have lower leverage levels, so the larger the size of the company tend not choose liabilities.
3 Chinese Listed Company Capital Structure Empirical
Select total debt ratio, a measure of the capital structure, the total debt ratio = total liabilities / total assets, the assets and liabilities are book value. The study sample of 627 companies of the listed companies in China A shares in Shenzhen, the time node December 31, 2007.
3.1 classified by industry standards and Shenzhen A shares of 627 companies to the China Securities Regulatory Commission announced on April 4, 2001, listed companies in the industry classification Guidelines divided into 11 sectors, respectively: a farming, forestry, animal husbandry and fishery; b extractive industries; c manufacturing industry; d electricity, gas and water production and supply; e construction industry; f transportation, warehousing industry; g technology industry; h wholesale and retail trade; j financial, insurance industry; k the real estate industry; o Social Services.
We can be found in different sectors of the asset-liability ratio of the same, which means that its capital structure is also different. Lower asset-liability ratio of some industries, such as the IT industry and transportation, warehousing, asset-liability ratio of 38.48% and 37.47%, respectively; while some asset-liability ratio of the industry, such as finance, insurance, and construction industry, asset-liability ratio of 79.12% and 61.35%, respectively.
The financial industry due to its characteristics, the decision of this industry has a high rate of balance; the real estate business is a very typical capital-intensive enterprises, and has a high input , high-return characteristics of strong economies of scale. Real estate enterprises in China and the widespread problem of underfunded free enterprise funds required by bank loans. Real estate enterprises in China is doomed to its asset-liability ratio will be higher, and more than 50%; relatively low gearing ratio of the two industries of agriculture, forestry, animal husbandry, fisheries, transportation and warehousing industry, is between 30-45%, this is because these industry as fixed assets in high demand, the traditional industries operate in a stable, low gearing ratio. Shows that the debt levels of the various industries are its industrial characteristics consistent.
Capital industry, the causes of the differences: (1) asset operational capability. An industry total asset turnover, the higher the operational capability of the assets, sales revenue, faster recycling of funds, shows that the ability of the industry's debt, and therefore more inclined to financing decisions of the high debt ratio. From Table 1, we can see its particularity, the total asset turnover ratio was significantly higher than other industries, wholesale and retail trade was 138.06%, in addition to the financial industry, the construction industry was 86.63% have a higher debt ratio . industry, the level of competition and risk. The degree of competition in the industry is directly related to the risk of the industry, the low level of competition, commodity prices are mainly determined by the supply side, the lower the risk. Such as electricity, gas and water production and supply industry by more national control, a higher degree of nationalization, belonging to the utility companies in a monopoly position, there is no price competition, the risk of bankruptcy is very low or even zero. asset structure affect the capital structure of the industry, the higher the proportion of tangible assets, the greater the bankruptcy and liquidation of assets and the collateral value, the more likely to get bank credit, will lead to a higher rate of corporate liabilities. Such as construction, Table 3 shows that the industry's tangible assets ratio was significantly higher than other industries, so companies can rely on mortgage financing, so the higher debt ratio. Intangible assets ratio is high, the event of bankruptcy, the cost is higher, less liabilities financing. Such as the IT industry, tangible assets ratio was only 39.60 percent, 38.48 percent of the total debt ratio.
Total assets of 3.2 classification analysis by enterprise size scale of classification based on the total amount of assets of the 627 listed companies, the total assets of less than 10 million companies as small-scale enterprises; range between 10 billion and 10 billion enterprise as a medium-scale enterprises; total assets of more than 10 billion enterprise as large-scale enterprises. The average asset-liability ratio.
Comparison Chart 5 and Chart 6, we can clearly see that, although at least the number of large-scale enterprises, but its average debt rate is the highest, 61.25 %; largest number of medium-scale enterprises, the average debt ratio is only half the battle; small-scale enterprises both in quantity and average debt ratio are relatively low.
When we established enterprise scale analysis of its capital structure, get the above conclusion, but we also have to look at the problem with the vision of development, because the enterprise scale will change.
According to Marx's theory of firm size, we can know that, on the one hand, the purpose of the capitalist form enterprise to obtain the residual value, under certain conditions, the larger the size of the business, more give capitalists bring more profits. The pursuit of surplus value and the desire to improve labor productivity capitalists are willing to continue to expand the scale of enterprise. Capitalists desire to expand the scale of business, on the other hand, is limited by the objective conditions, technical force specialization; degree of concentration of capital; management oversight costs.
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