The Empirical Study On The Influence Of The Asset Quality On Debt Contracts Of Listed Companies

With the development of China’s securities market, the competition for the listed companies has become more and more fierce. Many companies are keen to increase investment to expand the scale of assets, but do not pay enough attention to management of assets. Asset quality is not only the basis for the development of the enterprise, but also a manifestation of the management level. With the spread and fermentaiiun of the internaLional financial crisis, loans conflict has been becoming more prominent. Being able to get a high amount of debt at a low cost is benefit for companies to improve production capacity, capital chain and the competitiveness. The academe has made a large amount of research to the DCV, and gained great meaningful academic achievements. Given the importance of asset quality information in the accounting information, this paper analyzes the influence of assets quality on the debt contract of listed companies in China.This paper chooses a list of companies of manufacturing industry as the research objects. Based on the financial data from2007～2011, the preservation of assets, structural of assets, the turnover of assets, the ability to obtain income of assets and the ability to obtain cash of assets five ways to measure the quality of the enterprise asset of twelve indicators were selected. Factor analysis is used to get assets quality factor. And the multiple regression model of assets quality and debt contracts were established. Through the research it discovered that the asset quality has important influence on the debt contract of the enterprise. It is concluded that the results of the empirical study as follows:the preservation and liquidity of China’s manufacturing enterprises’assets is generally good, but the profitability is common. The profitability of fixed assets and current assets in individual enterprises is not the same. The ability to obtain cash of assets has significant effect on debt contracts, and the promotion of it can effectively increase the availability and reduce the cost of debt. And to improve the profitability and preservation of assets can reduce the cost of debt. But creditors do not pay more attention to the structure and turnover ability. Debt financing is important for listed companies. At last, a series of proposals according to the conclusions above is put forward. These proposals include how to manage assets of enterprise for the enterprise managers and recommend creditors to pay more attention to the information reflected in the assets quality of corporate.