Research About The Financial Leverage Effect Of The SMEs

With the rapid development of the global economy, the economic development of our country has entered a new historical period, which provides a good development platform for the small and medium-sized enterprises. With the increasing number of small and medium enterprises, the increasing scale, they will inevitably face more severe competition in the market. SMEs to survive and develop in the tough competition in the market, it has an important role in funding can not be ignored. Sources of its own funds for SMEs in general is very limited, it is difficult to rely solely on their own funds to support the rapid and healthy development of enterprises. Therefore, debt financing is one of the essential means for SMEs to grow。Foreign scholars have effect earlier financial leverage debt financing were studied, and formed a relatively complete theoretical results to guide practice. Chinese scholars in this area started late, still in its initial stages. Theoretical aspects of relatively simple, relatively little empirical research content, mostly for the listed companies. How to effectively use financial leverage to play a positive effect on the development of enterprises, enhance the value of corporate entities, and the practical application of the theory to get in SMEs has important practical significance.This thesis order to leverage on the part of important research results at home and abroad are analyzed and research, and drawing on the basis of outstanding scholars on financial leverage research, summarize the content and the scope of this study were to SMEs defined; second part is related to the content of financial leverage and financial leverage, capital structure, a simple theory collate and summarize financial analysis later laid a theoretical foundation; SMEs in the third part describes the current financing process showing some of the characteristics of the performance of different capital structures varying degrees of use of financial leverage, such as excessive debt capital, increased financial risk; higher equity capital can not be efficient use of financial leverage, the loss of financial leverage. The fourth part first briefly introduces the basic overview of H Company, analyze the utilization of the company’s financial leverage H H according to changes in the capital structure of the company for three years, and according to the company’s financial leverage some inspiration H analyze the situation was; Part Ⅴ according to the data analysis concluded, and how the future development of SMEs in the capital according to their structural characteristics of effective use of financial leverage to make recommendations; Finally, this paper points out deficiencies exist. The purpose of this study was to analyze the financial leverage through the utilization of SMEs, so as to promote full use of financial leverage of SMEs to improve financial management capacity to provide scientific basis. Through this study, I grew a lot of knowledge about aspects of financial leverage, and also hopes to develop SMEs in China is getting better.