Study On The Effect Of SMEs'asset Structure On Their Debt-paying Ability

Asset structure has a great influence on enterprise's production, operation and financial condition. Today, the financing difficulties of SMEs have become an important reason for restricting its development. The main reason of financing difficulties is the unreasonable asset structure, and this phenomenon led to its poor debt-paying ability.Dos SMEs' asset structure have an influence on their debt-paying ability? How and how much? How to optimize its capital structure? In this paper, these problems will be solved. This paper will analyze the impact mechanism of the asset structure on solvency of the listed SMEs in overall from short term and long term. Then select 457 listed SMEs from Shenzhen SME board and use the latest five years data as samples.This paper use factor analysis model to construct short-term solvency index,long-term solvency indicator and comprehensive solvency indicator, and these indexes will be used as explained variables. Besides, this paper will use assets structural indicators as explanatory variables, and use the ridge regression model to research the relationship between the explained and explanatory variables.The study result shows that the asset structure of SMEs has some influence on the debt-paying ability. Financial accounting for assets has a weakly negative influence on comprehensive liquidity indicator. Intangible accounting for assets has a significantly positive influence on comprehensive liquidity indicator. Monetary assets accounting and current assets accounting have a significantly positive influence on comprehensive liquidity indicator. Accounts receivable accounting and inventory accounting have a significantly negative influence on comprehensive liquidity indicator. Proportion of fixed assets has a weakly negative influence on comprehensive liquidity indicator.According to the results of the study, this paper put forward to some proposals.The SMEs should determine the proportion of financial assets reasonably, and increase the investment of intangible assets and quicken capital turnover. Furthermore,the SMEs also need to strengthen the supervision of accounts receivable, inventory and liquid assets and improve the utilization of fixed assets and so on. These advises can help SMEs to improve their debt-paying ability from optimize the asset structure,then solve their problems of the financing difficulties.