Research On The Influence Of Financial Performance Of Market-oriented Debt To Equity Swap In Yunnan Tin Industry Co.,Ltd.

In order to achieve sustainable and stable development,enterprises need to maintain sufficient funds.With the emergence of the economic crisis in recent years,the daily operation of enterprises is affected,the profitability is reduced,the debt funds are excessively relied on,the asset liability ratio is too high,and the lack of funds leads to the insufficient ability to repay debts,thus affecting the interests of creditors.In the 1990 s,China implemented the first round of debt to equity swap,which was led by the government,in order to alleviate the debt pressure of state-owned enterprises,reduce their asset liability ratio and reduce the non-performing assets of banks.Four asset management companies are established mainly by the Ministry of finance.These asset management companies are established temporarily for the purpose of debt to equity swap.They are led by the government.They are mainly to acquire the bank’s claims on state-owned enterprises,transform the claims into the equity of state-owned enterprises,so as to eliminate the non-performing assets that cannot be recovered by the bank.The whole process of implementation is supervised by the government The implementation of this round of debt to equity swap has achieved good results.Now in order to solve the debt problem of enterprises in recent years,and in combination with the implementation of supply side structural reform,the State Council issued the guidance on debt to equity swap of market-oriented banks in 2016,and started a new round of market-oriented debt to equity swap.This time,the debt to equity swap adopts the market-oriented mode,led by commercial banks,and attracts the participation of all social capitals.It can effectively reduce the asset liability ratio of enterprises,and make enterprises obtain stable and sustainable development.As the only listed company in the domestic tin industry,Tin Co.,Ltd.is also a traditional state-owned enterprise in the non-ferrous metal industry,which is in a leading position in the tin industry.Under the influence of the downturn of economic environment and non-ferrous metal price,the company encountered difficulties in its operation and development,poor profitability,debt difficulties and losses.On October16,2016,the market-oriented debt to equity swap cooperation with China Construction Bank was announced.In the above context,this paper makes an in-depth study on the market-oriented debt to equity swap of tin industry.First of all,it introduces the background and significance of the research,summarizes the research results of foreign and domestic experts and scholars on the motivation,mode and effect of debt to equity swap,and summarizes the writing ideas and application methods of this question.The second chapter introduces the theory,relevant indicators and analysis methods of market-oriented debt to equity swap and financial performance.The third chapter introduces the background and implementation of the new round of debt to equity swap,and compares the two rounds of debt to equity swap.In the fourth chapter,the author gives a brief introduction,including the analysis of its main operation and financial situation,then analyzes the motivation of its market-oriented debt to equity swap,and finally introduces its market-oriented debt to equity swap scheme from four aspects: process,mode,investment conditions and exit mode.The fifth chapter uses the event study method to study the short-term market impact of the announcement on the company by calculating the cumulative excess return rate,and analyzes the related risks of the company.Then,by using entropy method to calculate the entropy value,difference coefficient and weight of each index in 2013-2018,and using the gray correlation method and entropy method to calculate the value and correlation degree of each index’s gray correlation coefficient,it is concluded that the overall correlation degree of profitability and solvency of the Tin shares before and after the debt to equity swap shows a stable upward trend,and the operation ability and growth ability are obtained The positive impact of the market-oriented debt to equity swap is relatively not obvious,which shows that the market-oriented debt to equity swap has effectively reduced the leverage ratio of Tin shares,and made the company improve its credit while reducing its debt burden,promote further financing,and be able to invest in more projects,expand its business scale,and enhance its profitability.And compared with other three companies in the same industry.Finally,through the use of free cash flow discount method to evaluate the value of the enterprise,we canconclude that the value of the enterprise has been improved,which shows that the market-oriented debt to equity swap promotes the long-term development of the tin industry,and enhances the ability of maintaining and increasing the value of state-owned assets.The last chapter summarizes the research process and results,which shows that this market-oriented debt to equity swap enhances the company’s profitability and solvency,but the effect of operation and growth capacity is not obvious,which is conducive to the company’s further financing and investment,and promotes the long-term stable development of the company.And through the debt to equity evaluation system,mode and withdrawal,the paper puts forward some suggestions on the market-oriented debt to equity swap.This paper can provide value for the research of this market-oriented debt to equity swap of tin industry,and contribute to the relevant research of the same industry.