Research On The Financial Impact Of Huarong Energy Company Limited's Debt-to-Equity Plan

The " Debt-to-equity " is not a strange expression in China,in the early 90 years of the last century,China had the other practice of debt-to-equity swaps.But the early one is leading by government,we usually call it as " Debt-to-Equity " under policy.With the domestic economic development had gradually slowdown,a rising rate of corporate liabilities and the bank's non-performing assets,the risk is more and more high.In the background of supply-front economics," Debt-to-Equity " came back in the public.In this paper,I first introduced the research background and methods.Then introduced the background of marketization " Debt-to-Equity ",as well as relevant theoretical basis.I use Huarong Energy as an example,analyzed the specific implementation plan of its " Debt-to-Equity " plan,the causes of debts and risk.Then,I analyzed the cause of Huarong Energy's Debt from two aspects.And through the simulation implementation in the previous years,analysis and predict the financial effect of " Debt-to-Equity " plan in short-term and long-term based on management financial statement.Finally I made my conclusion and put forward some suggestions for enterprise development.By adopting the method of management in the financial statements and radar map,this paper argues that " Debt-to-Equity " plan mainly to help Huarong Energy to ease the financial crisis in the short term,avoid falling into financial difficulties,even bankruptcy.But if you want to restore the profitability of the enterprise,you should rely on enterprise transformation,further development in energy or other market.This marketization " Debt-to-Equity " also facies many challenges,such as the bankruptcy law is not sound,enterprise moral crisis and so on.It needs the social to work together for further improvement.