Financing Of Smes And Financing Efficiency

As the most active part of today's market economy, the small and medium size enterprises play an essential role to the national economy. Due to its characteristics of fast growth and high operating risk, the shortage of funds has become a critical obstacle which affects the development of small and medium size enterprises. Consecutively, how to find feasible financing ways and improve the financing efficiency becomes an urgent task that we are faced with.Based on the enterprise capital structure theory, this paper summarizes the factors that influence the financing efficiency, following with the analysis on the theoretic efficiency of each kind of financing way accordingly. Then it compares the financing experiences of small and medium size enterprises in US, Britain and Japan, respectively, which sets up a reference for the study of our own financing issue. The paper then assesses the financing efficiency from both macro and micro point of view according to the current financing status of small and medium size enterprises. Finally, the paper researches the feasible financial method for small and medium size enterprises by real example study on the performance of a set of listed companies.The paper consists of five parts. In the first part, it introduces different financing methods and reviews the development of capital structure theory, which was based on MM theory. By referring to the existing studies, the financing efficiency is defined as the maximum deployment of limited financing resources. Then the paper summarizes the four factors that influence the financing arrangements which are the utilization of funding, financing cost, financing risk and freedom of financing. According to the comparison of these four aspects on self-funding, debt financing and equity financing, it concludes that self-funding features with highest efficiency, following by debt financing and the equity financing has lowest efficiency. In the second part, the paper compares the macro-system of government support and microstructure of enterprise financing in America, Britain and Japan, respectively. The purpose of the comparison is to set up an effective index for further analysis on our own financing situation of small and medium size enterprises. In the third chapter, this paper examines the current situation of small and medium size enterprises financing. Firstly, it gives definition of small and medium size enterprises and then introduces the difficulties that those enterprises are faced with during the financing process. It assesses both micro and macro financing efficiency based on the statistic data. Finally, it discusses the characteristic of the financing problem under the circumstance of global financial crisis. In the fourth part, with financial analysis method, this paper selects several effective financial indexes to study on the real examples. The performances before and after IPO of a batch of listed small and medium size enterprises are reviewed with these financial indexes. In the last part, based on the study and conclusion in Chapter four, this paper provides certain advises from the angles of both micro enterprise management and macroeconomic control.