A Study On The Capital Structure Of Lu Shang Property Company

Any enterprise should survive in a certain macro economic environment including real estate company. So the investment and financing of enterprise will inevitably be affected by the macroeconomic environment, including the capital structure of the enterprise. Real estate industry has many upstream and downstream enterprises, involving a wide range, so the real estate industry is sensitive to changes in the economic environment. The real estate industry fluctuates with the economic cycle and the degree of prosperity also shows cyclical changes. Capital structure decision-making is an important financial activities of the real estate company. Faced with different economic cycles, the capital structure will be different. From the perspective of dynamic capital structure adjustment, this paper explored the issue of capital structure adjusting with the economic cycle, which provides a reference for the real estate company about how to adjust its capital structure faced with economic cycle.Through case analysis, this paper studied Lushang’s capital structure adjusting with the economic cycle.First of all, the capital structure theory and the theory of economic cycle are described in the theoretical part; secondly, this paper views Lushang property as study object, describing its capital structure status, analyzing whether its capital structure adapt to the change of economic cycle, making comparison with leading company in the real estate industry; then, the writer analyzed the existing problems of lushang corporation’s capital structure. Finally, in order to improve capital structure of Lushang corporation, some policy recommendations are given.This paper analyzed Lushang company’s capital structure. The result showed that Lushang corporation does not adapt to the economic cycle and its capital structure does not adjust flexibly with economic cycle. To solve these problems, the author put forward some suggestions as follows:enhance the ability of company’s capital structure adjust with economic cycle; reform the financing way; improve the efficiency of capital; improve the credibility of the enterprise and optimize the product structure; strive for credit funds, develop sales strategy reasonably and strive to return the funds.