Study Of Influence Of The Capital Structure Of Automobile Manufacturing Industry Listed Companies On Profitability

Capital structure has long been a focus in the study of the western theories.Capital structure involves each enterprise’s link, such as operation, capital raising andprofit assignment,etc. It is very important to the development of the enterprise.Because the study of capital structure theory in China starts late, the enterprisemanagement lack of consciousness of capital structure. Therefore, capital structureshould become the focus of enterprise financial management in China. China’sautomobile manufacturing industry is the fundmental industry of the national economyin our country especially vehicle manufacturing industry, which plays an importantrole in the development of the national economy. In view of the obvious industrialfeatures of the capital structure, this article selects the vehicle manufacturing listedcompanies as the research object. Through the study of Influence of the capitalstructure of the vehicle automobile manufacturing industry on profitability, the paperprovided reasonable suggestions for the vehicle automobile manufacturing listedcompanies and will make it health and improve the overall profitability of automobilemanufacturing listed companies.First of all, this paper simply reviewed the capital structure of Chinese andwestern and introduced some western capital structure theory and simply illustratedthe theory of capital structure for our references. Secondly, this paper selected24firmsin whole vehicle manufacturing.Then this paper analyzed the overall developmentsituation of our country’s vehicle manufacturing and analyzed the current situation ofcapital structure and profitability through several indicators. It can be seen through theanalysis that its assets and liabilities level is slightly on the high side, its average asset-liability ratio is on the decline, debt financing structure is unreasonable, the level oflong-term liabilities is low, it inclines to equity financing. The overall profitability of vehicle manufacturing listed companies in our country is in a state of decline.Secondly it selected9representative indexes, evaluated profitability ofautomobile manufacturing industry listed companies by factor analysis, and calculatedprofitability total score of24sample firms. The regression analysis was conductedbetween the profitability and2indicator of the capital structure. Then it can be seenthe relationship between capital structure and profitability of vehicle manufacturinglisted companies. First of all, the asset-liability ratio and profitability are negativecorrelation. Second, the long-term debt assets ratio and profitability are positivecorrelation.At last, on the basis of the empirical analysis, in combination with the results ofregression analysis, the paper provided reasonable suggestions for automobilemanufacturing through the external market environment and automobilemanufacturing industry itself. By this, the enterprise profitability will be improved.