Structural Optimization Of Capital In Listed Companies

Over 90% of listed companies in China are state-owned enterprises and state- owned capital holding companies (direct and indirect holding). Based on analysis of the overall conditions and changes of capital structure of listed companies, following conclusions are made: Capital structure of listed companies has been greatly improved compared with before their listing and those unlisted ones.1. the rate of liabilities/capital decreases a lot due to broadening of capital source.2 net capital profit rate and average profit rate, the two indexes of capital utilization, have been improved to some degree. 3. distribution of profit is varied and flexible. Yet, many problems still exist: unbalance of capital structure; over-utilization and insufficient utilization of capital result in low profit; distributive elasticity of profit is too large. These problems hinder the development of capital market and result in mismanagement and low efficiency of capital. Causes for these problems are as follows: incomplete theory, restrictions on financial systems, inner restrictions from listed companies.To optimize the capital structure, following counter-measures should be taken:1. goals:to decrease the fluent liabilities rate and the state-owned stocking , to make use of the capital and maximize profit ,to improve distribution of profit. 2. principles: to minimize added average capital cost, to maximize capital profit, to decentralize risk, capital structure to be elastic3. standards : quality and quantity analysis4. specific measures : to improve outer investment conditions , to decentralize stock ownership, innovating inner system and management such as property rights, to inspire the talents, to perfect financial system. The analysis may offer some suggestion on the deepening of stated-owned enterprises reform, improving the present capital structure and speeding up the establishment of modern enterprise system.