A Study On The Relationship Between The Capital Structure And The Performance Of The Listed Appliances Companies

The relationship between the capital structure and the corporate performance ofthe listed appliances companies in China is worthy of being studied for its greattheoretical and practical value. The capital structure decision-making theory is animportant component of theory of the firm. The breakthroughs of capital structuretheory research will be able to effectively promote the development of theory of thecorporation. With the rapid development of the appliances industry in China and theimprovement of the modem corporate system established in listed appliancescompanies, it is very necessary to discuss how improving capital structure influencesfirm performance.At Present,the research of the relationship between capital structure and corporateperformance mainly focused on the whole listed companies of the A share market.Because studies have showed that the capital structure is sharply significant betweendifferent industries, it is very necessary to research by industry. Although someresearchers have been conducted and studied on listed single industry, they didn'thave a comprehensive measurement of corporate performance. They just focused onthe use of many profitability indicators to explore the relationship between capitalstructure and corporate performance, while ignoring the comprehensive reflection ofthe performance, such as solvency of the debt, operating capacity and growthindicators. Based on this consideration and considering the above-mentionedindicators, the paper adopts SASAC's performance evaluation system, combined withsome scholar's research, and selects 11 indicators to reflect the four dimensionsmentioned above. Then the paper analyses the 11 indicators with factor analysis andreached a comprehensive performance indicator for the listed appliances companies inChina, which denotes Per. From the empirical angle, the paper probes initially into therelationship between the capital structure and the performance of the listed appliancescompanies in our country. Based on the relevant theories and research documents athome and abroad,the paper chooses 30 listed appliances companies in our country asthe whole sample. First of all, the paper analyzes the reality of capital structure andthe cause how it comes into being. Then according to the crossing data of yearlyfinancial reports of listed companies from 2006 to 2008, and takes asset-liability ratioand current liability ratio as the proxy of capital structure, takes comprehensiveperformance indicator Per as the proxy of enterprise performance, and takes size, liquidity of common stocks, as the control variables. Then the paper brings forward tothree hypotheses, constructs two models. One is a multivariate linear model, the othera quadratic curve model. The paper makes descriptive and relevant statistical analysisand regression analysis on the relationship between the capital structure and businessperformance from 2006 to 2008, then tests and analyzes the regression results. At lastaccording to the regression analysis, quadratic curve to the total samples are taken forregression analysis to explore appliances optimal interval of capital structure in listedappliances companies.By empirical research,the paper comes to the following conclusions: There issignificantly negative correlation between asset-liability ratio and corporateperformance, but it doesn't have a reasonable scope of liabilities. And there is alsonegative correlation between current liabilities and corporation. The conclusion aresupported by all the crossing data from 2006 to 2008. Finally,the paper raises somesuggestions on the capital structure optimization for the listed appliances companiesin China.