Research On Financial Leverage Effect Of Country Garden

In recent years,the development of real estate,an important industry part of the national economy,seems to be slowing down.Because the real estate business is characterized by capital-intensive and high asset-liability ratios,with the economy rising so fast,all walks of life have a very large demand for capital,and real estate is no exception.In order to obtain more sources of funds,many real estates will choose the debt financing method with fast money and low cost.With the passage of time,the financial leverage will become higher and higher.Therefore,the problem of high leverage is a hot topic currently studied by scholars..If financial leverage is a negative effect,you only need to consider the situation of high leverage and negative effect,then you need to reduce leverage.If financial leverage has a positive effect,even high leverage can bring additional benefits to the business.Therefore,the key to studying the appropriate leverage level of real estate companies is to look at the financial leverage effect,and the financial leverage effect is only a yardstick to judge whether the company’s leverage level is reasonable.Therefore,it is necessary to study the main factors affecting the company’s leverage effect.The leverage level decision provides the basis.Country Garden Holdings has become a benchmark company in China’s real estate industry,and analyzing its financial leverage can provide reference for other real estate companies to optimize their financial leverage.Therefore,this article will combine the current domestic real estate giant-Country Garden Holdings.Based on relevant theories,and using literature induction,comparative analysis,case analysis and multiple regression analysis,it analyzes Country Garden’s financial status,financial leverage effect and influencing factors.First of all,it explains the historical background and importance,research methods and contents,including literature review,etc.of this paper,and describes the relevant basic theories,including financial leverage theory,asset structure theory and risk control theory.The second is to analyze the financial status and financial leverage effect of Country Garden,the main object of analysis,including comprehensive analysis of financial leverage coefficient,comprehensive analysis of EBIT and debt asset interest rate,EBIT growth rate and after-tax profit growth rate comprehensive analysis.In order to better adjust Country Garden’s financial leverage and optimize resource allocation,it is necessary to conduct an in-depth discussion on the influencing factors of Country Garden’s financial leverage effect through a combination of theoretical analysis and case analysis.The results show that Country Garden’s financial leverage exerted a positive effect in 2015 and 2016,and had a negative impact in 2017-2020.In the analysis of the reasons for the impact,Country Garden’s enterprise scale,market competitiveness and profitability are all related to financial leverage.There is an obvious positive correlation,while corporate solvency and financial leverage are significantly negatively correlated,while corporate operating capacity is not significantly related to financial leverage.According to the analysis results,we put forward Country Garden’s suggestions for rational use of financial leverage effect.We hope that through the research of this paper,it can provide reference for the real estate industry,and at the same time provide guidance for Country Garden to deleverage and optimize resource allocation in the future.