The Research On Relationship Of Equity Financing And Medium And Small-sized Enterprise's Capital Structure And Operational Performance

Medium and small-sized enterprises(MSE) have played an important part in the development of Chinese economy.The research on these enterprises' financing remains as an important task with great theoretical value and practical meaning.What kind of influence will the Medium and Small Enterprise Board,established in 2004,have on the performance of the MSE?With the point that equity financing has deep influence on a company's capital structure,the text is to illustrate how does equity financing influence the performance of the companies listed on medium and small enterprise board.Firstly,the author applies the related theories to analyze the relationship of the equity financing,capital structure and performance.Secondly,the author conducts describing covariance and analysis base on the data of 45 sample enterprises' capital structure and performance in 2003 and 2006.In the part of demonstration analysis,asset-liability ratio,liability ratio in interest and long-term liability ratio are used to reflect a company's capital structure,and the method of principal component analysis is used to set up the index to measure the synthetic performance.Calculate analysis has been conducted on the 45 sample enterprise's data in 2003 and 2006 within this framework.The result is that asset-liability ratio and liability ratio in interest have a negative relationship with the enterprise's performance,while long-term liability ratio has no relationship with the performance.Thus,companies listed on medium and small enterprise board can make uses of the equity financing to lower their asset-liability ratio and liability ratio in interest,and to enhance their level of performance.Finally,base on the result of analysis,the author put forward some viewpoints on the development of medium and small enterprise board and the financing of MES.