Research On Gree Electric's Financial Flexibilit

In recent years,it can be seen that the economic process around the world has started to slow down,which will be a great challenge for many private enterprises,but with the national policy "Made in China 2025" and various strategies to promote economic development,it brings different possibilities for the development of enterprises,so that they can better cope with today’s society The uncertainty of development.The challenges and opportunities that companies face require strategic transformation and investment opportunities,which require a strong level of financial resources.A gradual decline in the production capacity of manufacturing companies can be observed,coupled with the impact of external factors including international inter-competition and domestic policy reforms,which have led to a decline in consumption affecting the long-term growth of companies.Financial flexibility refers to a firm’s ability to reduce the impact of cash flow shortages and investment shocks in the face of significant disruptions such as external factors.In a volatile market,the financial flexibility that a company reserves allows it to make as many choices as possible to meet its own development in the face of future investment and financing needs,rather than being restricted by funding at every turn.In this thesis,we have conducted an in-depth study of Gree Electric by combining theoretical and case study approaches,collecting financial information data and operating reports from 2016 to 2021,and comprehensively analysing the company’s financial flexibility in terms of both financial resources and financial coordination.In this thesis,we will first sort out the current research findings on financial flexibility,including definitions,metrics,access and economic consequences.Then,we will lay the foundation for this thesis based on flexibility theory,uncertainty theory and financing priority theory.Next,we will present the basic situation and the current financial situation of Gree Electric.We will use Zeng Aimin’s metric to first specifically dissect Gree’s cash,debt and equity flexibility,and finally rub together a portfolio analysis.Using the entropy-TOPSIS approach,we can further understand how Gree’s financial flexibility varies and which metrics are more influenced by it.In addition,according to the latest research,it can be found that in addition to financial resource flexibility such as financial indicators,there is also financial coordination flexibility,including the ability to integrate resources and the flexibility of corporate financial policies and budget management,which can be analysed together to more clearly assess the financial flexibility of the company.The study shows that Gree Electric performs well in terms of financial resource flexibility,including maintaining a high level of cash holdings,a strong long-term debt servicing capacity and a high industry average dividend payout ratio.In addition,GREE adopts a finance-like money management model,which can effectively enhance the company’s financial coordination capability in terms of its ability to integrate resources,corporate financial policies and flexibility in budget management,thereby achieving efficient utilisation and effective management of financial resources.Gree Electric adopts an asset-light operation model,and its capital flow is constantly changing,through the purchase of a certain number of assets as well as investment actions to external parties,etc.resulting in an increase in Gree Electric’s cash,which in turn leads to a study of its capital structure and reveals that the ratio of current liabilities is high,which requires the enterprise to make certain improvements;in addition,Gree Electric also adopts a comprehensive budgeting method for cash flow budget management,which is based on the enterprise’s timely adjustment according to the semi-annual operation operation to ensure the effective implementation of financial policies.Through the study of GREE’s financial flexibility,this thesis gives several recommendations for other companies in the industry to follow,including: reasonable control of cash holdings,optimising debt and capital structure,enhancing equity flexibility,scientific use of financial flexibility,etc.It also establishes a reference framework for assessing the level of flexibility in financial resources and coordination.