Research On The Impact Of Market-oriented Debt-to-equity Swap On Firm Performance

Since 2008,China's leverage ratio has risen rapidly,especially in the non-financial enterprise sector.Under the macro background of China's economic downturn and high corporate leverage,the State Council issued a policy document on market-oriented debt-to-equity swaps in 2016,encouraging eligible companies to actively carry out market-oriented debt-to-equity swaps and assist supply-side structural reforms.This market-oriented debt-to-equity swap is very different from the policy-based debt-to-equity swaps of 18 years ago.In addition to reducing the leverage ratio,how does market-oriented debt-to-equity swap affect corporate performance,and whether enterprises can turn through market-oriented debt? The long-term development of the stocks is a question worthy of consideration for the participants in the market-oriented debt-to-equity swap.This paper selects the case of Yunnan Tin Industry 's market-oriented debt-to-equity swap,which aims to study how the market-oriented debt-to-equity swap policy affects corporate performance and provides suggestions for companies that are or will soon implement debt-to-equity swaps.Therefore,the first chapter of this paper expounds the research background,research significance,research methods,structural arrangement and main contributions of the article,and explains the starting point and necessity of the article research.The second chapter is the literature review and theoretical basis,which provides the discussion of the article.The literature reference and theoretical basis make the case analysis process more persuasive;the third chapter is the analysis of the institutional background and status quo,introducing the basic model of debt-to-equity swap,the situation of two debt-to-equity swaps,and the policy-oriented nature of market-oriented debt-equity swaps.The document provides the institutional basis for the case analysis below,and summarizes the significance of market-oriented debt-to-equity swaps.The significance of the enterprise can provide a research perspective for case analysis.The fourth chapter introduces the basic situation of Yunnan Tin Group.The two debt-to-equity swaps implemented by Yunnan Tin Industry were compared and analyzed from three aspects: reasons,implementation process and impact,summarizing the characteristics of market-oriented debt-to-equity swaps.The fifth chapter is the research focus,using the event research method to evaluate the short-term performance of the company.The research finds that market-oriented debt-to-equity conversion can increase the value of the enterprise and bring excess returns to investors.Using financial indicators and non-financial indicators to evaluate the long-term performance of enterprises,from the analysis of financial indicators,it can be found that the debt-to-equity swap has a greater impact on the solvency of enterprises.The reduction of financial income by reducing interest income affects the profitability of enterprises,but the effect is limited..Through the analysis of accounting data,it is found that debt-to-equity swaps cannot directly affect the operational capability and development capability of enterprises.However,through the analysis of non-financial indicators,it is found that the implementation plan of Yunnan Tin Industry's market-based debt-to-equity swaps does affect the financial risks of enterprises.Governance and credit quality will all contribute to the improvement of long-term performance and promote business development.Finally,using the EVA performance evaluation method,by calculating the economic value added of Yunnan Tin,it is found that the performance of the company has indeed improved,thus proving the previous conclusions.The sixth chapter summarizes the case analysis,and gives some enlightenment to the implementation of market-oriented debt-to-equity swap enterprises: the premise of insisting on marketization;choosing the appropriate debt-to-equity swap model to prevent risks;improving corporate governance and improving management Efficiency is the goal.The main contributions of this paper are: the representative enterprises selected in the case analysis are representative and time-sensitive.Although there are many enterprises participating in the market-oriented debt-to-equity swap,there are still a few cases in which the progress is smooth.The research object of this paper can provide other enterprises as high-quality cases.Learn from.The comparative analysis of the reasons,implementation process and impact of Yunnan Tin Industry's two debt-to-equity swaps is innovative,and research is conducted through various methods to make the research results more reliable.