High Liability-to-Asset Rate——The Problem And Its Solution Of A State-owned Telecom Company

The thesis, which consists mainly of two sections: the one including acase and that including the case analysis, displays and analyzes afinancial management case.The part of the case analyzes the financial problems and challenges that a communication company in a city of Guangdong Province encounters in the course of its development and draws a conclusion from that that high liability rate would have been the bottleneck to obstacle its further growing. An objective and detailed illustration is also made in this section, concerning the serious consequences caused by high liability rate as well as the produced effects and defects when it tackled the problem.That part of case analysis applies the financial management theory and financial analysis method to make a thorough analysis as to what led the company to liability, which resulted from both the peculiarities with the telecom industry and the generally-encountered problems owing to internal management and unfavorable environment. It reveals the great damages caused by the high debt rate and points out that only when its availability and repayment, which are determined by the easily-changing situations, have been definitively guaranteed could an enterprise raise aIIIdebt. TherefOre, it is suggested that as a telecom enterprise, it shouldstrengthen its awareness of the financial risk so that the problem of highliability rate cou1d be further dealt with in such aspects as the enterprise'smoney-collecting and investment, costing and day-to-day caPitalmanagement and so on.The thesis finally concludes that challenged by the raPidly-exPandingdomestic market and those anxiously-waiting as we11 as well-preparedforeign telecom comPanies, the national telecom industry has tobreakthrough the traditional caPita1 operation, try to reach a balancebetween the comParative advantage of its caPacity imProvement andlower flnancial risk so as to make a better use of the financialmanagement tools, establish a reasonable caPital stfuctuYe, guarantee anenterprise's proper operation and raPid growing, and realize its value tothe full.