An Empirical Analysis On Retained Earning Level,Financial Flexibility And Dividend Policy

Faced with the continuous development of the current world economy,the company's operating environment has changed dramatically.Since the financial tsunami swept through in 2008,companies have paid more and more attention to financial flexibility and listed it as a key factor that management considers when making financial decisions.The financial flexibility of the enterprise reserves can calmly deal with the adverse impacts caused by the drastic changes of environmental uncertainty,and at the same time seize the favorable investment opportunities in environmental changes.In this paper,when discussing the influencing factors of dividend policy,based on the relationship between the company's retained earnings and dividends,it is combined with the adjustment effect of financial flexibility.The beginning of the article expressed the research background and significance,and then sorted,summarized and summarized the literature and theory in chronological order,which helped lay a foundation for empirical research.Then the three variables: the level of retained earnings,financial flexibility and the relevance of the listed company's dividend policy are theoretically analyzed,and four research hypotheses are proposed in this paper.The empirical part first builds a model,selects the appropriate explanatory variables and explained variables,and combines descriptive statistics with correlation analysis and multiple regression to further verify whether the hypothesis is true.The article concludes with a conclusion and constructive comments on the regulatory authorities.The article selects the data of A-share listed companies in the last eight years of2011-2018 as a sample,and draws conclusions based on this regression analysis.The regression results show that there is a positive correlation between the level of retained earnings of domestic companies and cash dividends,and after the introduction of financial flexibility in the two,the correlation increases;when the marginal value of financial flexibility is introduced in the two,the correlation weakens.In other words,companies with higher marginal value of financial flexibility are less willing to issue cash dividends.In view of this,this article believes that for long-term development,companies should have a positive understanding of financial flexibility,maintain appropriate flexibility,and correctly recognize the marginal value of financial flexibility;regulators should fully consider the role of financial flexibility when formulating policies,which is more scientific and reasonable Guide the company 's dividend payment decisions.This article introduces financial flexibility in the level of retained earnings and dividend distribution,and explores the impact of financial flexibility between the two.At the enterprise level,the management can gradually attach importance to financial flexibility and rational decision-making;at the regulatory level,it provides new ideas to revise policies.