Research Of The Capital Structure’s Impact On Corporate Performance For Real Estate Enterprise And Its Optimization

The real estate industry is a capital-intensive industry, its business cycle is long and is greater impacted by the macroeconomic and macro-control policies. So, good capital structures are critical to the development for the real estate enterprises and the industry. At present, China’s real estate market is in the critical period of industry consolidation as well as industry restructuring and upgrading, so the real estate enterprises must continuously improve their management ability and improve the company performance to get sustainable development. Therefore, it is necessary to research how the China real estate enterprises’capital structures affect the corporate performance, and optimize the capital structure based on the company performance.This paper will focus on how to optimize the capital structure of the real estate enterprises. First, this paper summaries the existing theory and study about capital structure and corporate performance of China real estate enterprises. Then this paper creates an impact model of enterprise’s capital structure on corporate performance to verify whether the capital structure can affect the corporate performance of real estate enterprises by affecting the enterprises’profitability, solvency, development capacity, operational capability and cash ability. Secondly, this paper estates a quantitative model of corporate performance, and takes the comprehensive factor score as the quantized value of corporate performance by factor analysis. Again, this paper respectively estates the regression model about capital structure’s three aspects on corporate performance’s quantized value, which is including the financing structure, the debt structure and the shareholding structure. Then test the model to get the function about the relationship between the capital structure and the corporate performance. Finally, estimates the optimization goals of the capital structure according to the verified function, and then puts forward the optimization recommendations for the capital structures of China’s real estate enterprises.This paper shows that, the capital structure can affect the real estate enterprises’ performance by the negative impact on profitability and solvency ability, and the positive impact on development ability, and the capital structure can’t affect the real estate enterprises’performance by operational capability and cash ability.This paper also shows that, the liabilities financing in the financing structure can improve the corporate performance, and as the addition of the liabilities financing, the increased amount of corporate performance will increase at first and then reduce, and the optimal debt ratio is [52.72%,61.93%]. The short-term liabilities financing will in the debt structure will reduce the corporate performance, and the reduce amount of corporate performance will reduce at first and then increase, and the short-term liabilities proportion should be controlled less than15%. For the ownership structure, there is no significant relationship for ownership concentration and corporate performance. State control will enhance the corporate performance, and the increased amount of corporate performance will increase at first and then reduce, and the optimal state control ratio is [34.87%,39.22%], and there is no significant relationship for ownership concentration and corporate performance when the other control styles.