Research About De-leveraging Of Steel Enterprises In The Context Of Supply Side Structural Reform

Since the financial crisis in 2008,China’s non-financial enterprises have accumulated a highly level of debt and financial leverage,especially in the steel industry.According to the China iron and steel association,the average asset-liability ratio of its member companies has climbed from 48.9% in 2001 to 69.6% in 2016.Under the background of the supply side structural reform,in order to solve the problem of generally highly financial leverage in iron and steel enterprises in our country on the current,this paper uses the method of literature analysis,statistical analysis and case study to research financial leverage risk and resolving measures of iron and steel enterprise,provides some ways to reduce financial risk for the iron and steel enterprises.First of all,this paper uses the method of literature research to find the theoretical basis of enterprises should control the level of financial leverage on reasonably level to against financial risks.Secondly,based on the operation characteristics of iron and steel industry in our country,this paper concluded that long-term rapid expansion,low degree of intensive,serious homogeneity competition,insufficient profit ability and low investment efficiency is the main causes which led to generally highly financial leverage and financial risk of iron and steel enterprises on the current.Thirdly,this paper uses the method of statistical analysis to analyze the financial data from 2005 to 2016 of 33 steel companies in Shanghai and Shenzhen stock market,analyze the changes of the level of financial leverage in iron and steel enterprises in 12 years,further selects 10 enterprises with good operating efficiency as samples to analyze the available reference range of financial leverage for other iron and steel enterprises.Finally,this paper selects XinJiang Bayi Iron and Steel Co.,Ltd.,the following is called "Bayi Iron & Steel",which is representative in the iron and steel industry as a case to analyze the reasons of its highly financial leverage and ways of de-leveraging,provide the reference andrevelation to other enterprises in iron and steel industry which want to reduce the financial leverage.