The Impact Of Asset Sale On Corporate Financial Performance

The sale of the company’s assets and corporate mergers and acquisitions, are the means of capital operation of the company, the company is to adjust the business boundary or the size of the way. Asset sales as the company’s contraction of capital operation is an important way, has widely application in Chinese listed companies. However, for the capital of Chinese listed companies sell behavior can effectively improve the company’s operating performance, related research is not much, also has not yet reached a consensus.After the event of a recent financial index quarter sold 678 assets of 399 listing Corporation in Chinese Shanghai and Shenzhen stock market 2001-2010 years of research data, using Matthew J. Clayton and Natalia Reisel (2013) research method, Earnings per share (EPS) and return on assets (ROA) as the explanatory variable,the relative value of the transaction (RTV) as the key explanatory variables, the relative transaction value (RTV). A larger value indicates that the relative size of assets is bigger, and joined the company leverage ratio (Lev), net operating cash flow per share (OCFPS), asset turnover rate (Cur), total assets turnover rate (TAT) as explanatory variables, the effects of short-term financial performance of the sale of assets, assets of the sale of the company in the short term performance is improved, and the degree of improvement with the expansion of trade scale is relatively increased, these results support the sale of assets to ask about the company The financing theory of the title, the theory of "the return of the enterprise", the agency theory and the management efficiency hypothesis. J. Clayton Matthew and Reisel Natalia (2013) on the short-term performance of the asset sale of the research, found that the company’s leverage ratio is higher, the short-term financial performance of the asset sale will be better. And this paper shows that in our country, the lower the leverage ratio of the company, the better the short-term financial performance of the asset sale. Then this paper selects inventory turnover rate, operating income as output variables, various fees and taxes, total assets, the rate of cost, as input variables, the use of DEA Malmquist index method for the sale of the assets on the financial performance of the company’s long-term impact research. Research shows that asset sales in the short term can make the company’s financial performance has been improved, but the financial performance of the company’s long-term positive effect is not obvious, and a company’s financial performance in the sale of assets are generally poor.In research that the sale of assets in the short term the company’s performance is improved on the basis, we further investigated the under different transaction size and different sectors of the assets of the company sold behavior of short-term financial performance influence, specifically, we according to the relative transaction value of different asset sale points for large-scale asset sale events and the small size of the assets for sale at the event to examine the different conditions asset sale of short-term financial performance impact; according to the different companies in the industry, the company is divided into industrial companies and non industrial type company. The effects of asset sale to the different nature of the company’s short-term financial performance.The research results show that when the relative transaction value is relatively low, the relative transaction value of the company’s financial performance and asset sale has a significant negative correlation, which is contradictory to the conclusion of the total sample regression. When the relative transaction value is higher, the relative transaction value of the company’s financial performance and asset sale has a significant positive correlation, which is the same as the conclusion of the total sample regression. For before a conclusion of the opposite, may be due to asset sale of relatively low value of the company before the sale of assets is in a relatively good business environment, this kind of company for small scale of the company’s business structure adjustment or motivation for earnings management of small scale of asset sale. Therefore, the small size of the assets of such companies to sell, the lower the relative value of the asset sale of the transaction, the company’s financial performance but better. We also conclude that there is no significant difference in the effect of asset sale behavior of industrial and non industrial companies on corporate financial performance, which provides a guarantee for the robustness of the conclusions of this paper.According to the research conclusion, this paper puts forward the policy suggestions from two aspects. That is:For enterprises, when the operating performance is poor, managers can choose the asset sale to improve the performance of the enterprise. For the excessive diversification of enterprises, in order to improve the way of business concentration of the assets of the sale of assets to be configured to better improve the performance of the enterprise.For the relevant regulatory authorities, in addition to carry on the management to the process of a sale of the enterprise assets, also want to attention the high debt rate of the company after the sale of the assets of the asset allocation supervision, to avoid the enterprise high debt management become the norm.