| The recovery of global economy has still been weak since the 2008 financial crisis. China's economy is still sustaining rapid growth, but the speed of growth has decelerated. Meanwhile, the debt issue of Chinese enterprises has drawn increasing attention in recent years.Debt operation is widely used by modern enterprises for its financial leverage effect, but financial leverage is a''double-edged sword". There are two kinds of financial leverage effect, positive and negative. If properly used, the financial leverage can create extra benefits to the enterprise. On the contrary, the excessive financial leverage will also bring financial risk, and the enterprise has to pay the price for it.Shipping is a typical cyclical industry. It is deeply influenced by economic environment. The operation risk of shipping enterprises is very high because they have to face heated competition. This article focuses on the shipping enterprises in China and takes COSCO Holding as an example. Based on the analysis and study on COSCO Holding's financial data in different periods and through the comparison between COSCO Holding's and the shipping listed companies'data, this article illustrates the financial leverage situation of COSCO Holding in both strong cycle and weak cycle. In addition, it researches whether the financial leverage effect is applicable for COSCO Holding. Then, an estimate on the financial risk caused by high financial leverage is made. It also estimates the risk control defect of COSCO Holding. Last but not the least, this article provides concrete and on-target suggestions to the shipping enterprises on how to reduce the financial leverage and control the risk.This article is helpful for the shipping enterprises to enhance their understanding on the financial leverage. It can also improve their financial management. To a certain extent, this article has practical guiding significance for the shipping enterprises on how to reduce the financial leverage and control the risk. |
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