Study On Real Estate Enterprise Diversification And Cash Flow

In theory, Business diversification for the enterprise to provide a variety of sources of cash flow, so as to supplement the overall operating cash flow effectively, it reflects the company’s capability of pay, solvency directly, and also it affects cash flow of financing and investment indirectly. But in reality, But in reality, the real estate industry is an industry that subject to be limited by national and local policies strictly. Which the most important limit is to financial policies, making the real estate enterprises to face the shortage of funds, in addition with the policy of buying restrict so that the receivables situation of real estate business in operating cash flow become "worse." Thus, is the strategic decision to diversify real estate business able to cope with difficulties in the current market environment is seen as a chance to seek a breakthrough? How could diversification improve cash flow of the companies? How could the level of operation diversification affects cash flows? And what is the relationship between the levels of diversification and the structure of cash flow? These has apparently become a theoretical topic and question needs to study and answer.This paper uses cash flow indicators to reflect the financial condition of the real estate industry diversification, in addition to use HDI to measure the levels of real estate diversification is to study the relationship between the important content.As the above, this article bases on the top 100 listed companies of real estate in our country as the foundation, By adopting the combination of the theory and empirical research method, selected the 95 companies during 2011-2013 as study sample. First confirm the diversity of the divisions of the business metrics, then build the financial index mainly of cash flow, to do descriptive statistics from operating cash flow, investment cash flow, financing cash flow and net cash flow with real estate diversification degree, and from the whole and partition between the correlation and regression analysis. The empirical concludes that, the our country real estate diversification degree in HDI(Herfindahl index 0.1) interval and operating cash flow index was positive correlation; diversification and investment cash flow index, financing cash flow index, net cash flow index correlation was not significant.In the end, this papers propose suggestions and measures combined with conclusion, also offers feasible advice for real estate enterprises diversification.