Research On Relationship Between Capital Structure And Business Performance Of Coal Companies

Operating performance determines the survival and development of enterprises.To protect the enterprise and efficient operations, capital structure and operatingperformance for the relationship between research scholars concern has been theresearch focus. Important role in the coal industry for the development of our nationaleconomy, the coal sector listed companies much attention of investors. But everyindustry has grass herbicides missing companies, there are also a lot of coal enterpriseitself unreasonable capital structure issue, which restricts improve their businessperformance. How to deal with coal companies affected by the crisis, seeking stabledevelopment of enterprises, which require us to learn coal company’s capital structureand operating performance seriously.In this paper, the coal industry as the research object, combining theoreticalresearch related to capital structure and operating performance, analyzes thedevelopment of coal resources in China’s national economy in a pivotal position, andlisted companies in China’s coal industry summary of the characteristics of coal listedcompanies descriptive statistical analysis of capital structure. In empirical studies, thepaper selected30listed companies in the coal industry, with its six years of2007-2012data were analyzed to explore the relationship between capital structureand operating performance. To study the relationship between capital structure andoperating performance of empirical research using regression analysis to samples ofthe company’s capital structure as an independent variable; coal operatingperformance of listed companies as the dependent variable in the selected operatingperformance measure, the paper chooses net10indicators of return on assets, netprofit margin, accounts receivable turnover, inventory turnover and total assetgrowth as the basis of factor analysis, factor analysis in order to achieve a reasonablemeasure of business performance objectives.Through empirical findings on samples of the coal industry the company’s capital structure and operating performance of listed show: asset-liability ratio of coalenterprises and their business performance showed a significant positive correlation;long-term assets suitable rate and operating performance of the relationship as asignificant negative correlation; equity concentration and coal company’s operatingperformance is positively correlated; correlation between the proportion of corporateshares and corporate performance is not significant.For the above findings, the coal industry to optimize the capital structure of listedcompanies, this paper presents itself from coal companies and macro-policy level thefollowing recommendations:(1) an appropriate increase in the gearing ratio;(2) tostrengthen financial management;(3) the protection of outstanding shares theinterests of shareholders;(4) to optimize the capital structure of the dynamicmechanism;(5) to strengthen capital operation of coal enterprises;(6) the ability tofocus on sustainable growth of enterprises;(7) sound corporate bond market;(8)promoting coal listed the company’s overall market. Hope that through thesepathways, so that the capital structure of coal enterprises increasingly rationalized inorder to fundamentally improve the coal business performance to reach the level ofthe purpose of achieving the long-term healthy development of coal enterprises.