Study On Optimization Of Capital Structure Of X Clothing Company

For quite a long time,As a traditional manufacturing industry, clothing industry hasnot only guaranteed people’s most basic necessities of life but also make greatcontributions to job enlargement and enhancement of international trade cooperation.After access of WTO, the clothing manufacturing industry in China is faced withnew opportunities and challenges. With low technical difficulties and mechanicalrequirements in clothing industry, being short of brands, and giving priority to OEM,However, difficult financing of labor-intensive clothing industry has become a“common problem”. The development of capital market in China is imperfect, so thatclothing industry’s financing channels are narrow and financing tools are single, capitalsmainly come from bank loans. Production funds mainly depend on bank credits,accounting for more than50%. In addition, residual funds are raised by enterprisesthemselves.Capitals are core resources for modern enterprises’ survival and development. Inthe financing process of enterprises, a rational capital structure not only can reduceenterprises’ capital costs and increase enterprises’ profits under the condition of thesame inputs but also is in favor of specifying enterprises’ behaviors, so as to improveenterprises’ market value.In the thesis, the capital structure optimization of X Clothing Company is mainlyresearched, and current situations for the capital structure of X Clothing Company areanalyzed systematically on the basis of research achievements on correlation theories offoreign capital structure and domestic capital structure optimization theories.Furthermore, matching relationship of members in enterprises’ capital structure mayinfluence enterprise values, which is mainly researched. Firstly, roots of existingproblems in the capital structure of X Clothing Company are found through systematicanalysis on relevant financial indexes of X Clothing Company and horizontalcomparison with benchmarking enterprises in the same industry in China; secondly, theoptimal capital structure point of X Clothing Company is confirmed with the use ofstatic equation of optimal capital structure under the precondition that enterprise value maximization is the optimal object. Capital structure is adjusted aiming at applicationconditions of enterprises on levers under the precondition of hypothesis; finally, internaland external environmental factors influencing enterprises’ capital structure areconsidered comprehensively, and prioritization schemes and solutions are proposed.In the thesis, more rational capital structure is sought for X Clothing Companythrough combination of theories and practices, systematic analysis on its causes andforming process of capital structure conditions, with X Clothing Company as theresearch object, according to the thought of finding problems–analyzing problems–solving problems. The purpose is to make enterprises’ financing channels smoother, toimprove core competitiveness of X Clothing Company, and to realize maximization ofenterprise values. Therefore, domestic textile and clothing listed companies can usecapital structure optimization researches of X Clothing Company as reference in capitalstructure optimization.