Sustainable Growth Model And Empirical Study

Along with the rapid development of capital market, maintaining the sustainable growth of enterprise has been widely accepted as a strategic idea. It has been the core of the enterprise growth strategy management to cope with the relation between sales growth and profit growth, real growth and sustainable growth. Using the sustainable growth model to carry on the analysis and the empirical study is the main trend in current enterprise growth research.Currently the theoretical circle in our country mainly acknowledge the following two sustainable growth rate models (SGR models): Higgins' SGR model and Van Horne's SGR model. Other two models, Roppaport's SGR model and Colley's SGR model, which are based on the cash flow, arouse scholar's interest only in recent several years. With the aid of the model, we can judge the enterprise's growth potential, it can also provide the managers substantive help in the formulation of financial budget plan, the trade-off of decision schemes and so on. In terms of research method, this paper applies empirical study connected with theories. In particular, first this paper introduces the establishment foundation of four mature sustainable models; then analyzes and evaluates each model, and points out its limitation; finally, take the Shanghai-Shenzhen 300 Index as a sample, using data information from 2001 to 2005, this article paper tests and verifies the sustainable growth circumstances of total sample and industry sample included with the help of the above four models, and then draws the conclusion that Shanghai-Shenzhen 300 Index did not realize SGR from 2001 to 2005 in the Higgins' SGR model, Van Horne's SGR model, Roppaport's SGR model, but in Colley's SGR, sustainable growth rate is realized.; in addition, the test for small sample manufacture industry also gets the same conclusion with the overall sample. Through empirical test, the advice is Higgins model is the first choice when enterprises studying sustainable growth.Innovation of this article mainly manifests in the below aspect: First, chooses Shanghai-Shenzhen 300 Index and the manufacturing industry as the sample for the first time, at present in the academic circle, no scholar has taken the Shanghai-Shenzhen 300 Index as the object of empirical study; Second, adopts the sample company 2001-2005 year data information, the time span is long enough to explains sample company's development condition in a long time, so it can overcome the cross-section data limitation; Third, as in the growth research, we have used four sustainable growth models to verify the sustainability of development, and we have considered both the financial factor and the cash flow, all above make our conclusion more near the realistic.