Analysis Of The Relationship Between Capital Structure And Corporate Performance Of SQ Company

Iron and steel industry is the pillar industry of the national economy, the healthydevelopment of iron and steel industry also provide support for the whole country’s economicstability and orderly development and security. From the last century60s, the iron and steelindustry of our country has formed a large scale and occupied a important place in theinternational market. However, compared with foreign steel companies, our country’s steelindustry has many serious problems，such as low industrial concentration, high degree ofhomogeneity, and disorderly competition. With the rapid development of our country’seconomy, especially entering the WTO, iron and steel industry is facing more and morecomplex internal and external environment and increasingly fierce competition. According tothe China iron and steel association issued running status of iron and steel industry, iron andsteel enterprises almost losing money in2012.SQ company is a wholly-owned enterprises of the capital iron and steel corporation,affected by the entire industry downturn and objective external factors, SQ company businessperformance fell sharply in2012. Except for the external objective reasons, the SQ company’scapital structure also exist some problems, then leading to a lot of problems，such as theshortage of company funds, liquidity problems and too old machine and equipments.Reasonable planning of SQ company capital structure, so as to make the companyperformance to achieve the best condition is the key point of this case study.This case research process is as follows: first of all, the related concept of capitalstructure and corporate performance to carry on the simple introduction, case analysis for lateruse. Second, the use of data to analyze the SQ company capital structure situation, found theproblem. Third, the use of traditional financial analysis methods, from the company’s profitability, operating ability and growth ability for simple face the SQ company performanceevaluation. Fourth, the evaluation index of corporate performance and corporate capitalstructure, regression analysis and see whether there is optimal, the optimal capital structure.Fifth, in view of the above analysis gives the SQ company some Suggestions.