Research On The Impact Of Sany’s Financial Flexibility Procyclical Adjustment On Enterprise Performance

Under the condition of uncertain external environment,financial flexibility management is very important to improve the risk response ability of enterprises.The study of financial flexibility has become a hot topic in recent years.A large number of empirical studies have confirmed the positive role of financial flexibility,pointing out that when encountering unexpected major adverse shocks,enterprises with financial flexibility can timely raise and use financial resources,and maintain the stable growth of investment and performance by better preventing external shocks and taking advantage of the opportunities brought by uncertain events.Compared with non cyclical industries,financial flexibility management of cyclical industries is more important.When the downturn of the industry comes,due to the reduction of downstream demand and overcapacity,income growth decreases and financial pressure increases.How does the pro cyclical adjustment management of financial flexibility enhance the anti cyclical ability of enterprises and reduce the business risk brought by the cyclical fluctuation of the industry?In this paper,Sany is selected as the research case to study how to reserve financial flexibility in the upward period of the industry and release financial flexibility in the downward period of the industry,so as to enhance the anti cyclical ability of enterprises,reduce business risks and achieve stable growth of performance.The results show that:Sany performs better than other enterprises in the recession period of the industry,and after the recovery of the industry prosperity,it lags behind its competitors,and is in a higher position in the same industry,showing a strong ability of performance counter cyclical smoothing.To a large extent,the realization of this ability comes from Sany’s flexible financial management.In the construction machinery industry,Sany reserves its financial flexibility mainly by holding high amount of cash and retaining the remaining debt ability.In the industry downturn period,Sany releases financial flexibility,timely scheduling and using financial resources to support the normal operation of the enterprise.The specific ways include:Sany provides more relaxed credit policies than competitors to boost revenue;due to the sufficient capital reserves in the early stage,Sany can seize valuable investment opportunities and use its own funds for investment;Sany can also continue to protect the industry Holding high R&D investment,developing competitive products,improving gross profit rate,realizing differentiation;easing financing constraints,reducing bankruptcy risk,making it easier for enterprises to obtain funds in the capital market.Finally,under the influence of the above four paths,Sany realized the anti cycle effect of financial flexibility through financial flexibility management.When the enterprise is in a turbulent economic environment and a continuously fluctuating industry environment,it can maintain its dominant position and realize the long-term stability and development of the enterprise.Finally,combined with the above analysis,this paper draws a conclusion that adjusting the financial flexibility Pro cyclically is helpful to enhance the anti cyclical ability of enterprises and ensure the stability of enterprise performance.And put forward some suggestions on how to enter the financial flexibility management.