Asset Structure And Corporate Performance

The guarantee of the implement of financial management is having a reasonable asset structure while enterprises run business smoothly. But in current research in financial management, people do less research in asset structure than capital structure. In the same way, investors care more about the operation achievement of the public listed companies than the asset condition of enterprises. Actually, the asset structure is very important to enterprises. It can reflect the capacity of operation, the structure of assets and characteristics of operation.This paper is having analyzed domestic and international documents, and select related indicators of asset structure that affect corporate performance. The information technology industry is new which is based on modern scientific theory and scientific technology. It is a service industry with advanced theory and communication technology. This paper has selected data of information technology industries from 2006-2008 as samples and 10 indicators for component analysis as follows: ROA, ROE, return of sales, the debt-to-asset ratio, debt equity ratio, main operating margins, EPS, operating cash flow per share, growth rate of total assets. I create a comprehensive indicator as dependent variable reflecting corporate performance through component analysis and choose 4 indicators(liquidity ratio, inventory ratio, ratio of fixed assets, ratio of intangible asset)as independent variable to reflect asset structure. The paper does research on asset structure of information technology companies and corporate performance to study on the relationship between them. Although different situation among different corporate in the same industry, there is relationship between structure of asset and corporate performance. Liquidity is negative correlation to corporate performance; relationship between inventory and corporate performance is not significant; fixed assets, intangible assets and total asset turnover are correlation to corporate performance. It proves that the effective ways to boost company performance are reasonable collocating fund, optimizing asset structure, improving the whole asset function.Finally, based on formal theoretical analysis and the results of the empirical study, this paper put forward some helpful suggestions to the optimizing of the asset structure and finance management in concern of the asset structure of modern enterprises in our country as follows: improve efficiency of fixed assets; increase input of intangible assets and make rational use of them; increase total asset turnover ratio.