The Research On Financial Performance Of Capital Operations For Textile And Garment Listed Companies

As China’s traditional and national industry, the development of textile and garmentindustry is vital to national economy. China’s entry into WTO has brought about manychanges both in domestic and foreign environment,which come with new opportunitiesand challenges;recently, affected by the financial crisis,the demand of textile and garmentproducts decreases across the world, making the export volume of our country dropconsiderably. The traditional ways of production and operation are confronted withbottlenecks, many textile and garment enterprises apply capital operation such asrestructuring plan,mergers and acquisitions to integrate enterprises’ resources,in order tofind new economic growth points. Capital operation has been widely used in manyenterprises across all kinds of trades in our country. But, as to whether capital operationcan effectively improve the financial performance of textile listed companies or not, fewstudies concerned can be found in both academia and practice. In view of this situation,this paper researches on the influence on financial performance of capital operation fortextile and garment listed companies.This paper combines events analysis and financial analysis together, observes the shareprice fluctuation before and after capital operation of textile and garment listed companies,and selects five financial index to measure the financial performance of textile andgarment listed companies’ capital operation, then makes classified analyses from differentcapital operation mode and different financial index, finally arrives at the followingconclusions: in general, the market expects a significant improvement on capital operationperformance, but in fact, financial performance of textile and garment listed companiesturn out to be fluctuating since the capital operation was applied, the performance didn’tincrease stably;to be specific, expanding capital operation didn’t improve the financialperformance of the samples companies,while deflating capital operation did improve thefinancial performance of the sample companies, though the increase did not lastlong,things are complicated for reorganized capital operation, stock transfer madefinancial performance increase at first,then followed a significant drop,while debtrestructuring’s financial performance have gone through an obvious small rise due to theimproved debt structure, in addition, different financial index were related to financialperformance scores in varying degrees, profitability, solvency, cash flow were stronglyrelated to financial performance, that is the reason why financial performance fluctuatedin this way, on another hand, operational capacity and development capacity were weakly related to financial performance, to sum it up, china’s textile and garment listedcompanies’ capital operation is not as successful as we think,there still have a lot to do tobetter the situations.In this paper, theoretical research and empirical research are based on a lot of formerstudies, the textile and apparel listed company capital operation behavior were analyzed,and put forward some suggestions. But there are still some deficiencies, such as thevolume of samples, the time span and the type of indicators, those deficiencies should berevised in the future.