Cash Flow From Operating Activities,Financing Structure And Corporate Value

The shortage of cash flow,high financing cost,operation risk and financial risk are the major factors restricting the economic transition,deepening reform and high-quality development.Corporate value maximization is the main goal of financial management,and corporate value is closely related to operating cash flow,financing cost and financial risk determined by financing structure.In the academic circles at home and abroad,there are many researches on cash flow and financing structure,and cash flow and corporate value,but no unified conclusion has been formed.Moreover,there are some "blind spots".For example,few researches combine cash flow,financing structure and corporate value,and link balance sheet items with cash flow statement items;Most of the "cash flows" used are "free cash flows",and few use "cash flows from operating activities" in the statement of cash flows.Macroeconomic policy,business cycle,business nature,growth,positive or negative cash flow from operating activities and other factors are not paid enough attention.In fact,there is a close relationship between balance sheet items,income statement items and cash flow statement items.Therefore,this paper aims to maximize corporate value,focuses on cash flow from operating activities,combines cash flow,financing structure and corporate value,links balance sheet items with cash flow statement items,and takes all A-share listed companies from 2007 to 2021 as research objects.This paper analyzes theoretically and empirically how the cash flow of operating activities affects the financing structure,how the cash flow of operating activities affects the company value,and whether the financing structure has an intermediary effect in the cash flow of operating activities affects the company value.Through the regression analysis of all samples,it is found that:(1)The cash flow of operating activities is significantly negatively correlated with short-term financing and significantly positively correlated with long-term financing.That is,companies with more sufficient cash flow from operating activities are more inclined to long-term financing in choosing the financing term structure.(2)Cash flow from operating activities is significantly negatively correlated with debt financing and significantly positively correlated with equity financing.That is,the more sufficient the cash flow of operating activities,the more inclined to equity financing in choosing the structure of financing methods.(3)Cash flow from operating activities is significantly positively correlated with the company’s value.That is,cash flow from operating activities is conducive to enhancing the value of the company.The more adequate the cash flow,the better the operating conditions and the greater the value of the company.(4)In the impact of cash flow from operating activities on the value of the company,the financing structure has an intermediary effect.Among them,in the intermediary role of financing term structure,the direct effect is 0.7006 and the indirect effect is 0.3550;in the intermediary role of debt financing,the direct effect is 0.9813 and the indirect effect is0.0744;in the intermediary role of equity financing,the direct effect is 0.5990 and the indirect effect is 0.4566.By examining the endogenous effect of the two-way causal effect between cash flow from operating activities and company value,it is found that there is endogenous between cash flow from operating activities and company value,but the estimation results using 2SLS-IV control endogenousness still support the hypothesis that cash flow from operating activities is conducive to enhancing company value.According to the classification of positive and negative cash flow from operating activities,it is found that:(1)Both positive cash flow companies and negative cash flow companies tend to choose long-term financing and equity financing in terms of financing structure,which is consistent with the results of regression analysis of all samples.(2)cash flow from positive operating activities has a significant positive impact on the company’s value,which is consistent with the results of regression analysis of all samples;Negative cash flow from operating activities has a significant negative impact on company value and is inconsistent with the results of the regression analysis of the whole sample.Classification of regression according to the nature of enterprises shows that:(1)Both state-owned companies and non-state-owned companies squint towards choose long-term financing and equity financing in terms of financing structure,which is consistent with the results of regression analysis of all samples.(2)Whether it is a sample enterprises owned by a state or a non-state-owned company,the cash flow generated by operating activities has a conspicuous positive impact on the value of the enterprises,which is consistent with the results of regression analysis of all samples.However,non-state-owned enterprises are more efficient in using capital to create corporate value.Classification of regression by economic cycle shows that:(1)Whether it is in the period of economic expansion or contraction,companies tend to choose long-term financing and equity financing in terms of financing structure,which is consistent with the results of regression analysis of all samples.(2)Whether a company is in a period of economic expansion or a period of contraction,cash flow from operating activities is positively correlated with the value of the company.In addition,enterprises in the period of economic expansion can enjoy the "cyclical dividend" brought by the good macro economy,making it more efficient for enterprises to use cash flow from operating activities to create company value.According to the classification of growth regression,it is found that:(1)Both high-growth and low-growth companies tend to choose long-term financing and equity financing in terms of financing structure,which is consistent with the results of regression analysis of all samples.(2)In the high-growth sample group,cash flow from operating activities had a conspicuous positive impact on the enterprise’s value,which was consistent with the results of regression analysis of all samples;However,in the low-growth sample group,cash flow from operating activities didn’t have a conspicuous impact on the value of the enterprise,which was inconsistent with the regression analysis results of the entire sample.The above research findings are of great significance for investors to optimize investment decisions,enterprises to improve financial management level,and government departments such as China Securities Regulatory Commission to strengthen supervision.First,overall,cash flow from operating activities has a significant positive impact on company value.Therefore,investors can adjust or optimize investment decisions based on cash flow from operating activities.However,the impact of cash flow from operating activities on corporate value varies with the difference of positive or negative cash flow from operating activities and growth.When making decisions based on cash flow from operating activities,investors should focus on companies with positive cash flow from operating activities and high-growth companies.Second,the financial arrangement of enterprises should pay attention to the cash flow of operating activities and financing structure,cash flow statement items and balance sheet items,in order to achieve the maximum value of the company.Third,the cash flow of business activities will affect the financing preferences of enterprises.When government departments formulate financial policies,banks and other financial institutions formulate credit rules,and the China Securities Regulatory Commission and other departments supervise the capital market,the impact of cash flow from operating activities on financing structure and financing preference should be considered.