A Case Study On The Financialization Of Jilin Aodong

With the arrival of the 21 st century,the pattern of China's manufacturing industry has undergone new changes and the labor cost has risen,so the earnings and profit margins of most manufacturing industries are relatively low and are gradually declining.In contrast,while capital and financial markets have developed rapidly,earnings in the financial sector have continued to rise.In this case,manufacturing enterprises have increased their investment in finance,resulting in the high proportion of financial assets in the assets of enterprises and the phenomenon of excessive financialization of manufacturing industry.In this context,this paper takes Jilin Aodong as an example to analyze the economic consequences of enterprise financialization.Firstly,the background of financialization of Jilin Aodong and the previous researches are expounded,and on this basis,the research ideas are obtained.Secondly,the paper defines the concepts of "financialization" and "financial assets",and then introduces the theories of "reservoir","investment substitution" and "diversification".Then,the paper introduces the basic situation of Jilin Aodong,the process of financialization and the current situation of financialization.With the analysis of external and internal factors of Jilin Aodong financialization motivation;Later,the paper introduces the influence of financialization of Jilin Aodong on its profitability,crowding out effect,risk and other aspects.Finally,the research conclusions are drawn and relevant suggestions are put forward.The conclusion shows that :(1)the use of idle funds to obtain profits and to deal with the external adverse impact of enterprises are the motivation of Jilin Aodong financialization motivation;(2)the financialization Jilin Aodong will give enterprises a certain consequences,make the enterprise net assets yield higher moments but low profit quality,enhance the short-term solvency but in the long run may reduce the enterprise solvency,the financial asset investment of the real assets of the enterprise investment are crowding out,due to the existence of the financial risk increased the overall risk of the enterprise;(3)Jilin Aodong has unstable profit structure and poor profit quality due to excessive financial earnings.In view of the above research conclusions,the following suggestions are proposed :(1)deep financialization needs to be prevented;(2)the risk of enterprise financialization needs to be prevented,which can be solved by configuring professionals;(3)the return of financial investment should feed the development of real industry;(4)the selection of invested enterprises should pay attention to its dividend policy to improve the quality of enterprise investment returns.