Research On Deleveraging Of Construction Enterprises

The phenomenon of "high leverage" and high asset-liability ratio prevalent in construction enterprises not only expands the financial risk,capital cost and credit risk of construction enterprises,limits the daily operating profit and reinvestment expansion ability of enterprises,but also makes enterprises lose their core competitiveness in the fierce market competition.Therefore,deleveraging is an inevitable choice to guide enterprises to build core competitiveness and achieve sustainable development.To implement the party central committee and state council on deepening the reform of the supply side structural decision deployment,deepening the reform of enterprises,promote the optimization of enterprise capital structure adjustment,to reduce corporate leverage and debt levels to effectively guard against and dissolve enterprise management risk,financial risk and enhance the capacity of sustainable development of enterprises play a vital role.Based on China’s macroeconomic situation,this paper puts forward the practical significance and path choice of the research on the problem of high leverage in construction industry.According to the domestic and foreign literature on deleveraging and theoretical study and review,to understand the specific impact of existing research on leverage level on enterprise performance,business development and other aspects,and to analyze and summarize the existing research conclusions and application results,on this basis,this study is conducted.At the same time,capital structure theory,capital cost theory and risk management theory are studied to lay the theoretical foundation of this paper.Combined with the background of high leverage and operation characteristics of China’s construction industry,the reasons for the high average leverage ratio in the industry are analyzed from the aspects of industry environment and internal management factors.In addition,a case study was conducted on X company,relevant materials and financial data of X company were collected,and the current situation of finance and financing as well as the causes of high leverage of X company were analyzed.The study showed that X company has problems such as lack of endogenous financing,extreme reliance on debt financing and single financing channels.Finally combining with the actual situation of the X company financing and business analysis,this paper puts forward foreign demand diversified financing ways,from direct to leverage the level of analysis,comparison and evaluation of X company apply multiple deleveraging scheme after the return on equity,earnings per share and return on total assets,and designed a concrete implementation scheme and implementation is expected as a result,through internal to the operating cost control and accounts receivable and inventory to strengthen management and enhance the operational efficiency of assets,to strengthen its operating ability,promote internal financing ability,for the same type in the construction industry enterprises to leverage a realistic reference value.