Research On The Capital Structure Of Gree Electric Appliances

Following the slogan “Made in China 2025”,adhering to the drive of innovation,intelligent transformation,strengthening the foundation,green development,and accelerating the transition from a manufacturing to a manufacturing power has become the guidepost and driving force for enterprises’ supply-side reform and sustainable development.China’s economy has entered a stage of steady growth and begun to transform.Gree Electric actively adapts to the national development trend and adjusts its development ideas for transformation and upgrading.There will be a large amount of capital demand for transformation and development,which requires capital structure as the entry point for investigating the source of corporate funds.Maintaining a good capital structure can ensure the implementation of the company’s development strategy,improve its financing level,and promote its transformation and upgrading.Simultaneously,Gree Electric is in the wave of reform and development.Its capital structure of high debt and rationality to cope with the development will be great challenge for enterprises.Also it need to be solved urgently.This study takes Zhuhai Gree Electric Appliance Co.,Ltd.(hereinafter referred to as Gree Electric Appliance)as the research object,and analyzes the current situation of Gree Electric’s capital structure by means of literature analysis,comparative analysis and case study.Firstly,starting from the necessity of capital structure research,it clarifies the significance of the capital structure of household appliance manufacturing enterprises to their survival and operation.Secondly,based on the literature analysis,it systematically reviews the concepts of domestic and foreign scholars on capital structure and related theories.From the company profile and business conditions,the study sorts out the basic situation of Gree Electric.Thirdly,from the perspective of debt structure,ownership structure,financing structure and financial leverage,the study analyzes the vertical and horizontal aspects of Gree’s capital structure.From the analysis the capital structure of Gree Electric,there exist problems of high debt scale,unreasonable debt maturity structure,single financing method as well as insufficient use of financial leverage.Also,combined with China’s monetary policy,Gree’s marketing model and corporate cash flow,etc.,the study analyzes the reasons for these problems.Finally,from the adjustment of debt scale,the stability of debt structure,the construction of a diversified financing system and the full use of financing leverage,the study provides countermeasures for the optimization of capital structure for Gree and promotes thehealthy development of household electric appliance manufacturers.