The Financial Flexibility Of Listed Company In China And The Impact On Company Performance

What this paper concerned is the financial flexibility of listed company in China. Most people think the financial flexibility is come from excess cash and the remaining debt capacity. The put forward of this concept is after21century and suffered widespread attention. And what spacial we have done is pay attention to the effect of market value of company. On this basis, we research what financial flexibility will do to corporate performance further, the way we deal with this question is taking FF into the regression model of ROA. That is we are trying to understand financial flexibility more comprehensively, so concern the effect on ROA,and this article is trying to take the source and effect of financial flexibility as a complete system, because the best method to test the effect of financial flexibility is analyse what will it do to corporate performance.Through empirical analysis, model2and model3through the use of MTB as a representative of the market value of company, the result shows that companies with relatively lower market value, their MTB is significantly negatively correlated with financial flexibility; and that companies with relatively higher market value, their MTB is significantly positively correlated with financial flexibility. This result indicating that if the market value excess a certain level, the effect of MTB to financial flexibility will change significantly. Finally, according to the model4, the empirical result shows that:the financial flexibility significant positive correlated with ROA. This means that the financial flexibility is beneficial to corporate performance.