A Study On The Use Efficiency Of Funds Raised By Listed Companies

As the most active and innovative micro subject in China’s economic system,small and medium-sized enterprises have more and more vigorous vitality.However,small scale,incomplete development,high cost of capital,financing difficulties,expensive financing and other problems have been restricting the development of smes.On May 17,2004,China securities regulatory commission(CSRC)agreed to set up the sme board of shenzhen stock exchange(sse),whose purpose is to provide direct financing platform for smes with growth potential and outstanding business.But a lot of enterprises after raising funds,did not bring the expected return to investors,even let investors suffer losses.Therefore,the efficiency of the use of raised funds has been more and more attention.The efficiency of the use of raised funds is not only an important yardstick to evaluate the effect of the use of raised funds,but also determines whether the enterprise can achieve sustainable development.In view of this,this paper analyzes and studies the use efficiency of the raised funds of Hubei Yichang Transportation Group Co.,Ltd.(hereinafter referred to as "Yichang transportation" or "the company"),hoping to improve the use efficiency of the raised funds of Yichang transportation,enhance the profitability and core competitiveness of the enterprise,so as to improve the financing behavior of other small and medium-sized board listed companies in the capital market.At the same time,help the securities regulatory authorities to strengthen the supervision of the use of raised funds.With the help of case analysis,literature review,comparison of business indicators and charts,Z-score model and other methods,this paper explores the efficiency of the use of raised funds and the reasons behind it by consulting the regular reports and interim reports before and after the listing of Yichang Transportation Company.Comparing the IPO of the enterprise,the investment projects before and after the fixed increase and their income,profitability,development ability,operation ability and other indicators,it is found that the investment income raised by Yichang Transportation Company is far lower than expected,the profitability after raising funds continues to decline,the development ability and operation ability are limited,and other problems,i.e.the raised funds are used inefficiently.The causes are the imperfect stock issuing mechanism,weak securities market supervision,local government intervention,lack of relevant laws and regulations,and imperfect internal governance structure.The above conclusions can not only trace backto the reasons behind the inefficient use of the funds raised by Yichang transportation,but also provide some experience and policy reference for the regulatory authorities.At the same time,it also provides investment reference and value judgment for external investors.