The Application Research Of Financial Leverage About XX Property Company Under The Sustainable Growth Situation

Financial leverage, a tool used to improve company value by utilizing debt to make the variation of common shareholders' equity exceeding the variation of profit before tax and interest, can result in extra profit or extra loss of the company. So how to utilize the financial leverage to gain extra profit whenas avoid financial risk as far as possible seems extremely important, especially for those real estate companies with intense capital and depending heavily on financial leverage.XX Property Co. Ltd grows from a small-scale real estate company to a huge integrated enterprise in less than twenty years by using all kinds of financial method and relying on the financial leverage randomization with the target to expand the scale and the rigid housing demand under the background of the urbanization lagging behind the industrialization. But the financial leverage randomization will lead to lurking peril for the sustainable development of the company. Especially when the company grows up and the macro background of real estate changed, the peril will be obstacles restricting the company's sustainable development. Thereby the company should adjust the orientation principle of financial leverage and avoid the leverage's abuse to enlarge the shareholder's benefits and improve the company's value. The company's sustainable development needs to match the operation strategy, financial strategy and the financial leverage, built the evaluation index system of the financial leverage application, utilize the leverage discrepancy, set up different period capital ponds to optimize the whole resource of the company and take full advantage of financial leverage considering the reasonable proportion equity financing.