Research On The Correlation Between Financial Structure And Operating Performance Of Listed Companies In Power Industry

With the development of enterprise, fund is always needed to be raised gradually. In order to maintain sufficient capital of production, operators have to select the source of finance each time, which is also called making financing decisions. The financial structure is also changed at the same time. Because of differences among each financial methods, managers need to consider their characteristics and compare with each other to choose the most reasonable one, which may be useful in increasing the wealth of company. There were a lot of research before based on various theories in this field. The relationship between debt and performance of company is described by theories proposed by Modigliani and Miller first. Tunneling is used to state the influence of ownership structure on performance. In addition, pecking order theory provides a reasonable order of financing focuses on the theories. The empirical methods have also been used into this field and mean a great deal to the research. Although the money power companies needed to be raised is very much, research on how to choose the sources is rare. So we pay attention to this aspect in this paper.The study is based on the reform of power system. Paper named No.9 published in 2015 means a new beginning of it. We explained the influence of policy on this industry. The structure and supply-demand relation of this industry were also analyzed during the research. In this industry, company needs to utilize the advantages of scale and improve its competitiveness, so it could be inferred from several viewpoints that the fund demand of power company is great. This situation has generated an urgent requirement of how to raise money efficiently. According to different sources of funding, we split the research into three and each part corresponded to a financial type. Based on this, we put forward our hypotheses and established the research models on the relationship between financing structure and performance. Finally we tested these hypotheses with the help of SPSS’s function, including descriptive statistics, correlation analysis and regression.There was a negative correlation between the performance and amount of trade credit financing in this research. This correlation was also adapted to short-term loan and the negative effect on performance was greater. On the other hand, we cannot confirmed the similar conclusions on structure of stock financing. Specifically, there was no similar correlation between the performance and the variables indicators, no matter the amount or the contribution of major shareholders and non-state shareholders. In part three, we confirmed a strong positive correlation between the money accumulated in the process of production and value. In the end, we explained the unique reasons of these conclusions and provided some suggestions to the power enterprises on what would they do to help improve their performance in the future.