Analysis Of The Motivation Of The Zero-leverage Policy Implemented By Hengrui Pharma

The traditional capital structure theory holds that enterprises should achieve the optimal capital structure through moderate debt financing and financial leverage to help enterprises reduce the cost of capital and achieve the goal of maximizing enterprise value.However,in reality,some enterprises are quite conservative in debt financing,and even some enterprises implement zero-leverage policy without using interest-bearing liabilities at all,which is contrary to the viewpoint put forward by traditional capital structure theory.This phenomenon has attracted the attention of scholars all over the world,and has been studied.On the basis of summarizing the literature on life cycle theory and the motivation of enterprises to implement zero-leverage policy,this thesis established the relationship between enterprise life cycle and the implementation of zero-leverage policy according to capital structure theory and life cycle theory.The study found that Hengrui Pharma was in the growth period in 2014-2015 and in the mature period in2016-2021.In 2014-2015,Hengrui Pharma implemented the zero-leverage policy based on the following two reasons: the first is financing constraints for the lack of guarantee ability,and the other is no need for debt financing with strong profitability and sufficient internal financing.In 2016-2021,there are five reasons for Hengrui Pharma to implement the zero-leverage policy.Firstly,the enterprise has strong profitability and sufficient internal financing.Secondly,cash flow from operating activities is abundant.Thirdly,Hengrui Pharma can continuously obtain advance payment through different channels;Fourthly,the conservative dividend distribution policy maximizes the retention of retained earnings.Finally,the enterprise stores financial flexibility by avoiding the use of debt financing.According to the above research conclusions,some suggestions were put forward.Enterprises should reasonably implement the zero-leverage policy,and pay attention to the impact of life cycle in the process of implementation.The situation that enterprises are forced to implement the zero-leverage policy because of their own characteristics,such as making a more detailed evaluation and developing the bond market in the process of seeking debt financing,broadening the financing channels of enterprises,and so on.The thesis is typical in case selection,choosing Hengrui Pharma,which is a representative enterprise in pharmaceutical manufacturing industry;Based on the perspective of life cycle,it enriches the research content of the motivation of enterprises to implement zero-leverage policy.The research has certain practical significance for enterprises to implement the zero-leverage policy,and provides some reference for enterprises to implement the zero-leverage policy reasonably according to their own conditions and pay attention to the impact of enterprise life cycle in the process of implementing the policy.The thesis has 14 figures,18 tables,and 84 references.