Research On GH Aviation Financing Decision Based On Life Cycle Theory

The theory of enterprise life cycle points out that enterprises,like other organic life bodies,will experience the process from birth to death.The financial strategy matrix model is a tool to analyze the value growth degree of a company based on two evaluation criteria: the ability to create value and the demand for capital.By embedding the life cycle theory into the financial strategy matrix model,we can evaluate the current value creation ability of an enterprise and whether the capital can meet the current growth according to the characteristics of the different life cycle of an enterprise,and then make the appropriate financial strategy for the enterprise.The internal financing decision-making is an important part of financial strategy,so when evaluating the financing decision-making of the company,it is more scientific and reasonable to use the financial strategy matrix model embedded in the life cycle theory for analysis.Air transport industry is a typical heavy asset industry,enterprises need more capital to operate.This paper aims to analyze the decision-making of such enterprises in different life cycle and put forward suggestions for improvement,so as to provide reference for other enterprises.In this paper,under the life cycle theory,the financial strategy matrixis used to study the corporate financing decision-making.In order to make the article have practical significance,the author uses the method of case study to analyze the financing decision-making of GH company in recent years.First of all,the financial strategy matrix is used to divide GH company’s2006-2019 into different life cycles,and the financing decisions in different cycles are studied.This paper analyzes GH company’s financing mode,capital structure and economic impact of financing decision.By comparing the indexes of GH company with the other two leading enterprises in the industry,this paper tries to find out the influence of financing decisions in different life cycle stages on their business performance.Then combined with the cost of capital,this paper analyzes the change of GH company’s financing mode.The research shows that GH company can make full use of various financing means to raise funds in the growth period to acquire other enterprises and expand its market scale,but the dividend payment rate is too high in the growth period,which is not conducive to the internal financing of enterprises;in the mature period,GH company can adjust the financing channels to reduce the capital cost by virtue of the advantages of its own business credit,but its business model is relatively single It has not been resolved,and its profitability is vulnerable to the market environment;GH company has more overseas assets and liabilities due to the needs of its overseas business,so it has foreign exchange exposure and foreign exchange risk.In this regard,there are three suggestions:(1)to implement the distribution policy of residual dividends;(2)to find new business growth points to ensure the internal growth of funds;(3)to improve the risk management mechanism to reduce foreign exchange risk exposure.