Research On Capital Structure In The Process Of Transformation And Upgrading Of Huaxi Corporation

In recent years,with the obvious downward pressure of traditional manufacturing industry,local enterprises have been also facing operating difficulties.To guide the transformation and upgrading of manufacturing enterprises is becoming an important way for them to get rid of difficulties.The transformation of enterprises can not be separated from the support of capital,and the financing of enterprises will bring changes to the capital structure,that is,the transformation is closely related to the capital structure.Therefore,the rationality of the capital structure of enterprises will affect the success of industrial transformation.This paper takes Huaxi stock,a representative company in the transformation of textile industry,as the research object,and mainly studies the rationality of capital structure in the transformation of the company.First of all,it introduces the current transformation and development of Huaxi stock using SWOT method to make a comprehensive analysis of its transformation.At the same time,the transformation of Huaxi stock needs the support of financing behavior,so it causes the change of capital structure,and then analyzes the current situation of its capital structure from the perspective of debt structure and equity structure;Secondly,from the perspective of profitability,financial risk and corporate value,this paper analyzes the effects of capital structure changes in the transformation and development of West China’s shares: the positive effects are mainly the increase of return on net assets,the earnings per share,the economic added value and the market value;the negative effects are the financial leverage increase,incapable debt paying and unstable development.Furthermore,from the current situation and negative effects of capital structure in the transformation of West China’s shares,this paper finds out the unreasonable debt and equity structure,and analyzes the causes of the issue.That is high dependence of government,increased demand for transformation funds as well as single financing channel;Finally,it puts forward the corresponding measures to optimize the capital structure of the company:reasonable debt,selection of diversified financing tools,optimization of equity structure,establishment of financial risk control system,improvement of cash flow management and improvement of profitability ability,which ensures that the capital structure of Huaxi stock in the transformation and development remains in a reasonable range.The contribution of this paper lies in combining the analysis of industrial transformation and capital structure,studying the changes and consequences of capital structure in the transformation of Huaxi stock,and providing reference for Huaxi stock and other private enterprises that need to transform and adjust capital structure.