Financing refers to the monetary transaction means to pay the purchase price exceeding cash, or the monetary means to raise funds for the acquisition of assets. Financing usually refers to the activities of direct or indirect financing between the holders and demanders of monetary funds. The following 3 1 empirical papers on financing methods and enterprise performance, friends may wish to refer to them more when writing papers.
Abstract: The irrational capital structure of small and medium-sized enterprises has become an important manifestation of the nonstandard capital market. This paper makes a statistical analysis of the financial data of listed companies in China's small and medium-sized enterprises before listing, summarizes the financing preferences of small and medium-sized enterprises, analyzes the relationship between financing methods of small and medium-sized enterprises and enterprise performance by using CORREL function, and investigates the optimal ranking of financing methods of sample small and medium-sized enterprises.
Paper Keywords: SME endogenous financing, equity financing, debt financing performance
Literature review
In terms of the choice of financing methods for small and medium-sized enterprises, all countries have done in-depth research, and the research results mainly focus on the external and internal factors that restrict enterprise financing, enterprise financing strategies, bond financing and equity financing. Modigliani and Miller (1958) used Marshall's market equilibrium analysis method to demonstrate that the choice of financing mode has nothing to do with enterprise value under the assumption that the capital market is perfect, the capital flows freely, the interest rate is consistent and there is no tax. Robichek and Myers( 1966) of the school of equilibrium theory combine the school of tax difference and the school of bankruptcy cost, and demonstrate the existence of market arbitrage cost by relaxing the assumptions of no tax burden and no bankruptcy cost. The minimum arbitrage cost corresponds to the optimal capital structure, and they think that the income and arbitrage cost of different capitals should be weighed to determine the financing method. Myers (1984) adopted the analytical framework of information asymmetry theory and found that enterprises have a priority when using different financing methods, that is, internal financing takes precedence over external financing, and debt financing takes precedence over equity financing. Zhan Sen and meckling (1986) believe that under the premise of increasingly perfect market, due to information asymmetry and inconsistent interests, there is agency cost between capital owners and operators, and the choice of the optimal financing mode of enterprises should minimize the comprehensive agency cost. Opler and Titema (1994) believe that the financing mode is related to the competition degree and strategy of enterprises in their products and factor markets, and enterprises should consider the losses that bankruptcy liquidation may cause to consumers and suppliers when choosing the financing mode.
At present, there have been many achievements in the research on financing methods of small and medium-sized enterprises in China. He Lu (2005) investigated the relationship between financing mode and its determinants from a static point of view, and made a detailed study on the relationship between financing mode and enterprise scale, growth, profitability, non-debt tax shield, asset mortgage value, economic added value and other factors. Zhang Jun et al. (2005) think that there is a tendency of over-financing in both equity and liabilities of enterprises. Zhu De Xinhe Zhu Hongliang (2007) found that the financing decisions of SMEs follow? Internal financing? Debt financing? This order does not conform to the trade-off theory or the optimal financing order theory. Luo Heduan (2006) believes that the financing mode of SMEs is influenced by the external environment, and more importantly, it depends on the role of endogenous variables and their relationship, especially the corporate governance structure and capital market. Xiao Zuoping (2009) thinks that under different legal systems, the controlling shareholders have different influences on financing methods, and the debt level is influenced by the legal system environment. It can be seen that domestic scholars have conducted in-depth research on the choice of financing methods.
To sum up, economists have studied the financing of small and medium-sized enterprises in many aspects. However, due to the different economic environment faced by enterprises, the efficiency of small and medium-sized enterprises in China is affected by directly learning from the successful financing methods of other countries. At present, many small and medium-sized enterprises in China have developed rapidly and successfully listed, and are in an advantageous position in their respective industries. Compared with listed companies in Shanghai and Shenzhen main board markets, SMEs show better profitability and higher growth. However, for most unlisted SMEs, financing is still the bottleneck restricting the development of enterprises.
An Empirical Study on Financing Mode Selection and Performance of SMEs
(a) Sample selection and data sources
The research sample of this paper is the financial report data of all small and medium-sized enterprises in the year before listing from 2004 to 2007. The number of listed companies is 38, 50, 102 and 202 respectively. The data comes from the prospectus of small and medium-sized board. Through C0RREL function in Excel, the correlation coefficient between the amount of different financing methods of sample enterprises and the current year's net profit and the growth rate of main business is calculated, and then linear regression analysis is carried out to determine which financing method can be selected to obtain the required funds at low cost and in time, so as to maximize the enterprise value.
(2) Variable arrangement
This paper uses net profit and growth rate of main business as indicators to reflect the performance ability of small and medium-sized enterprises. Strictly speaking, the performance of an enterprise is difficult to define and measure. So far, there is no way to clearly judge whether an enterprise has high profitability. As the result of accounting measurement, net profit reflects the income and cost level in a certain period. As a comprehensive embodiment of sales scale, cost control, asset operation and financing structure, it is the main index to measure the operating results of an enterprise. The growth rate of main business is an important index to evaluate the growth and performance development of enterprises and an important symbol to predict the trend of business expansion. There are endogenous financing, long-term debt financing and equity financing, trying to describe the correlation between financing methods and the performance of SMEs more accurately.
(3) Empirical test
The empirical test can judge the degree of correlation of variables by the amplitude of correlation coefficient, and calculate the correlation coefficient R by C0RREL function. The judgment criteria are as follows: │r│=0 completely irrelevant; 0 & lt│r│？ 0.3 basically irrelevant; 0.3 & lt│r│？ 0.5 low correlation; 0.5 & lt│r│？ 0.8 significant correlation; 0.8 & lt│r│& lt； 1 highly correlated; │r│= 1 completely related.
The closer the absolute value of r is to 1, the stronger the correlation is. Whether it is positive correlation or negative correlation is determined by the sign of R: r >; 0 positive correlation; R<0 is negatively correlated.
This paper uses CORREL function to analyze the correlation between the net profit from 2004 to 2007, the growth rate of main business income and different financing methods. See table 1 for the calculation results of specific correlation coefficients.
According to the calculation results and referring to the judgment criteria, it can be seen that:
The correlation coefficient between endogenous financing and net profit in 2004 is 0.85, showing a high correlation. The correlation coefficient between endogenous financing and the growth rate of main business income is 0.42, and the correlation is low, while the data of other groups are basically irrelevant.
According to the correlation between internal financing, net profit and growth rate of main business income, a linear regression equation with internal financing, net profit and growth rate of main business income as regression formal parameters is established: y=a+bx, A is calculated by intercept, and B is calculated by slope function, and the relationship between them is further analyzed.
A 1 = intercept (net profit, endogenous financing) = 12300593
B 1 = slope (net profit, endogenous financing) =0.35.
Establish a linear regression equation:
y= 12300593+0.35x
A2 = intercept (growth rate of main business income, internal financing) = 0. 19 B2 = slope (growth rate of main business income, internal financing) =2. 1.
Establish a linear regression equation:
y=0. 19+2. 1x
The results show that with the increase of endogenous financing, the growth rates of net profit and main business income are increasing, but the slope of the growth rate of main business income is larger, showing higher growth.
2. The correlation coefficient between endogenous financing and net profit in 2005 is 0.85, showing a high correlation. The correlation coefficient between long-term debt financing and net profit is -0.4 1, which shows a low negative correlation, while other groups of data are basically irrelevant.
According to the correlation between internal financing and long-term debt financing and net profit, a linear regression equation with internal financing, long-term debt financing and net profit as regression formal parameters is established, and the relationship between them is further analyzed.
A3 = intercept (net profit, endogenous financing) =7 182656.
B3 = slope (net profit, endogenous financing) =0.37.
Establish a linear regression equation:
y=7 182656+0.37x
A4 = Intercept (net profit, long-term debt financing) =4892 1568.
B4 = slope (net profit, long-term debt financing) =-0. 16.
Establish a linear regression equation:
y=4892 1568-0. 16x
The results show that with the increase of endogenous financing, the net profit increases steadily, while the increase of long-term debt financing leads to the decrease of net profit, which may be caused by bearing too much debt cost.
3. In 2006, the correlation coefficient between endogenous financing and net profit was 0.87, showing a high degree of positive correlation, while other groups of data were basically irrelevant.
According to the correlation between endogenous financing and net profit, a linear regression equation is established: y=a+bx, a is calculated by intercept, and b is calculated by slope function.
A5 = intercept (net profit, endogenous financing) =447985 1.
B5 = slope (net profit, endogenous financing) =0.32.
Establish a linear regression equation:
y=447985 1+0.32x
The results show that with the increase of endogenous financing, the net profit increases steadily, and the research results are the same as those of the previous two years.
4. In 2007, the correlation coefficient between endogenous financing and net profit was 0.83, showing a high degree of positive correlation, while other groups of data were basically irrelevant.
According to the correlation between endogenous financing and net profit, a linear regression equation is established: y=a+bx, a is calculated by intercept, and b is calculated by slope function.
A6 = intercept (net profit, endogenous financing) =3789509.
B6 = slope (net profit, internal financing) =0.3 1.
Establish a linear regression equation:
y=3789509+0.3 1x
The results show that with the increase of endogenous financing, the net profit increases steadily, and the research results are the same as those in previous years.
conclusion
Based on the empirical study of financing methods and performance of listed SMEs in China, the results show that there is a high correlation between endogenous financing and net profit of listed SMEs in different periods. From the regression equation, we can find that the net profit increases with the increase of endogenous financing, which is mainly due to the conversion of retained earnings of enterprises. The increase of net profit will inevitably increase the scale of endogenous financing. Some sample enterprises show that endogenous financing is positively related to the growth rate of main business income. Generally speaking, the profit quality and profitability of enterprises with more internal financing have improved, and their development prospects are more optimistic. There is a negative correlation between long-term debt financing and net profit of sample enterprises. From the linear regression equation, it can be seen that there is an opposite trend between long-term debt financing and net profit, which may be because long-term debt financing brings higher debt costs to enterprises, such as financing fees and interest fees, which reduces the profits of enterprises.
At present, China's capital market is imperfect, the threshold for SMEs to enter the open market is too high, and their own governance structure and information disclosure are flawed. In addition, some small and medium-sized enterprises rely on internal financing or shareholders' share expansion and capital increase in the growth stage. Financing from financial institutions or issuing bonds is a feasible way. Although the financing cost dilutes the profit, the income brought by the enterprise through capital operation is enough to pay the financing cost. At the same time, debt financing can play the role of financial leverage, improve earnings per share, and debt financing can save taxes.
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