Analysis On The Financial Leverage Effect Of Real Estate Enterprises Under High Debt Management

After decades of rapid economic development,China's comprehensive strength has been significantly improved,which also puts forward higher requirements for the development of enterprises.If enterprises can not follow the trend of economic development,they will face the risk of being eliminated.In enterprises,capital is the key element of survival and development,but the internal capital of enterprises is limited.In order to obtain more profits,more funds need to be raised for investment.Many enterprises choose debt financing to leverage financial leverage.The real estate industry is a capital intensive high debt industry,which needs a lot of capital support in the process of investment and development,so it is highly dependent on financial leverage.Debt management not only improves the income of real estate enterprises,but also brings huge financial risks.High financial leverage has become an important factor restricting the healthy development of the industry.With the proposal of China's deleveraging policy in 2016,financial leverage and the financial risks brought by financial leverage have attracted more and more attention of enterprises.Therefore,it is of great theoretical and practical significance to study how to make rational use of financial leverage,give full play to the positive effect of financial leverage and reduce the financial risks caused by financial leverage.Based on the research results at home and abroad,this paper uses the combination of theory and case study method to study the leading enterprise in the real estate industry,Greenland group.Combined with the actual situation of Greenland group,through the comparative analysis of the basic financial situation of Greenland group in recent ten years,it is found that Greenland group has the problems of large debt scale,reduced operating profit,tight cash flow,and unreasonable use of financial leverage.This paper also judges the financial leverage effect of Greenland group from three different perspectives:financial leverage coefficient,EBIT profit rate and EBIT profit growth rate.The three comparison methods show that the positive effect of financial leverage of Greenland group is restrained,and Greenland group has problems such as debt overdue,financing capacity decline and profitability decline,which increases the financial risk of enterprises.Due to the large financial risk of Greenland group at this stage,this paper analyzes the causes of the financial risk of Greenland group combined with the unreasonable use of financial leverage.Considering that many enterprises in China,especially real estate enterprises,have similar financial problems,this paper puts forward corresponding countermeasures for each problem:enterprises should optimize financing structure,enhance profitability,control financial cost,improve financial leverage,strengthen risk awareness,and pay attention to control measures for policy environment,industry environment and competition environment from the outside To provide suggestions for the healthy development of the group,and to provide reference for other enterprises with similar problems.