Research On Xiaomi Group Convertible Redeemable Preferred Stocks

With the development of economics,the traditional financing methods of equity financing and debt financing can no longer meet the growing financing demand,and there are many complex and innovative financing methods.The convertible redeemable preferred stock studied in this paper is one of them.It combines the characteristics of equity and liability,and has both equity and liability attributes,which makes it have its own unique financing characteristics.High-tech enterprises has a long period of research and development,but often does not have enough profits to support the company's initial high R&D expenditure.Therefore,in the early stage,high-tech companies often choose the combination of equity debt financing or the use of compound financial instruments with equity characteristics to finance.Convertible redeemable preferred stocks are such a hybrid financing method,which can play equity and debt financing.Their respective advantages are beneficial to avoid disadvantages.This paper selects Xiaomi Group to conduct research.The profit of the financial statements disclosed when Xiaomi went public in Hong Kong has a significant adverse impact on the impact of convertible redeemable preference stocks,which makes it difficult for investors to make investment decisions because of their accounting problems.The case of Xiaomi Group has a certain representativeness.Through case analysis,this paper compares the innovative financing path of convertible redeemable preference shares with traditional financing methods(IPO,bank loans,bond financing,etc.)from financing costs,financing efficiency,financing scale,financing restrictions,etc.The analysis shows the advantages and risks of convertible redeemable preferred stocks,expounds the feasibility of preferred stocks as the main financing method for high-tech enterprises,analyzes the problems and makes accounting suggestions,and calculates the financial indicators and EVA of enterprises.And analysis,the performance of the company through preferred stock financing.The future performance of the company was analyzed by the preferred financing of the Van Horn Sustainable Growth Model.Finally,through the case study,this paper summarizes the financing experience of convertible redeemable preference stocks,and draws the main conclusions.It also summarizes the accounting treatment problems that may appear in the application,and forecasts the criteria.