Under the condition of market economy, the financial significance of enterprise's survival and development goal lies in capital growth. According to the relationship between enterprise growth and capital sources, the ways to realize capital growth can be divided into three categories: internal accumulation, external financing and balanced growth. Among them, the balanced growth mode means that enterprises increase their liabilities in proportion to the increase of shareholders' equity while maintaining the existing financial structure and financial risks, so as to maintain the synchronous relationship between enterprise sales growth and financial capital growth, thus supporting enterprise sales growth. This sustainable growth mode will not consume the financial resources of enterprises, and can make enterprises develop in a sustained and balanced way, and avoid the negative impact of excessive growth or insufficient growth on enterprises. Therefore, this paper discusses this reliable and lasting growth strategy from the financial point of view.

First, the relationship between sustainable growth and corporate financing

The concept of sustainable growth of enterprises was first put forward by Professor Robert C. Higgins, a senior American financial expert. Professor Higgins studied the sustainable growth of enterprises from a static point of view, and defined the sustainable growth rate of enterprises as the maximum rate at which the company's sales can increase without exhausting financial resources. The basic idea of the model is that the growth of sales depends on the increase of company assets, while the increase of company assets depends on the growth rate of shareholders' equity without changing the company's operating efficiency and financial policy. The formula for calculating the sustainable growth rate is: sustainable growth rate = current retained earnings/initial shareholders' equity = (current net profit × current earnings retention rate)/initial shareholders' equity = initial net interest rate × current earnings retention rate = net sales rate × asset turnover rate × equity multiplier × earnings retention rate. The above formula shows that the sustainable growth rate of enterprises depends on four factors: net sales rate, asset turnover rate, equity multiplier and retained rate of return. Further using DuPont's financial analysis system, the net interest rate can be decomposed into the product of three financial ratios, that is, the return on net assets announced by listed companies in China, so the sustainable growth rate can also be understood as the product of net interest rate and retained earnings ratio. Because the net profit rate of sales and the turnover rate of assets represent the investment of the enterprise, the equity multiplier and the retained earnings ratio represent the financing and dividend distribution of the enterprise respectively, the four ratios comprehensively reflect the efficiency of various financial activities of the enterprise, so they can be used to comprehensively evaluate the operating performance of the enterprise and guide the implementation of the financial strategy of the enterprise.

Because the four ratios that affect the sustainable growth rate cannot be increased indefinitely, the sustainable growth rate is the best growth rate of the enterprise. From the perspective of enterprise financial resources, the sustainable development of enterprises can be measured by the difference between the maximum expected growth rate of enterprise sales and the actual growth rate without exhausting financial resources. The greater the difference, the lower the level of sustainable competitive advantage of enterprises based on financial resources; The smaller the difference, the higher the level of sustainable competitive advantage of enterprises based on financial resources. Only by maintaining the balance between sales target, operating efficiency and financial resources can enterprises maintain sustained growth.

Second, the financial strategy for sustainable growth of enterprises

Under the traditional extensive management mode, enterprises unilaterally pursue quantity and scale while ignoring investment quality, and the phenomenon of excessive growth and insufficient growth is more common in all enterprises. Overspeed growth refers to the fact that the actual sales growth rate is greater than the sustainable growth rate under the existing operating efficiency and financial situation of the enterprise. Excessive growth will make the financial resources of enterprises tight, and this negative impact is mainly reflected in the surge in investment capital demand brought about by high growth rate. When the risk of improving business efficiency and changing financial policies is large or limited, it may lead to financial failure of enterprises.

Insufficient growth means that the actual sales growth rate of enterprises is lower than the sustainable growth rate under the existing operating efficiency and financial situation. Enterprises in this state are often prone to excess funds, financial funds can not operate effectively, resulting in a huge waste of enterprise resources. Therefore, only sustainable growth is the best growth model for enterprises. Although the growth rate of enterprises is fast or slow, in the long run, it is always restricted by the sustainable growth rate. Therefore, different financial strategies should be adopted for both cases of excessive growth and insufficient growth.

(a) Financial strategy when the enterprise grows at an excessively high speed

Due to the rapid expansion of its products, the actual growth rate of product sales will usually be greater than the sustainable growth rate for a long time, which will lead to the funding gap. At this point, the enterprise should adopt the expansionary financial strategy of high debt, high income and less distribution, and consider the following specific ways.

1, issue new shares.

If enterprises consider increasing equity capital and have the ability to issue new shares, the funds raised by additional issuance can fill the capital gap brought about by rapid sales growth and provide funds for the growth of enterprises.

2. Reduce the dividend ratio.

When an enterprise needs to make use of retained earnings for higher-yield investment, it can appropriately reduce the dividend payment rate to shareholders. This part of investment must be used for the long-term development of the enterprise, so that shareholders can obtain higher long-term returns and improve the sustainable growth rate of the enterprise.

3. Improve the debt ratio.

Increasing debt financing can fill the funding gap caused by rapid sales growth. When the rate of return on assets is greater than the interest rate on liabilities, the greater the amount of funds raised by enterprises by using liabilities, the more obvious their financial leverage, and correspondingly, the sustainable growth rate of enterprises will also be improved.

4. Improve the net profit rate of sales and the turnover rate of total assets.

When the net sales rate is low, enterprises can improve the net sales rate by raising the sales price and controlling the cost. When the turnover rate of total assets is low, we can improve the utilization efficiency and the speed of cash withdrawal by changing the credit policy; Improve production efficiency and shorten production cycle by strengthening management; By leasing and selling idle fixed assets, we can minimize the occupation of assets and improve the turnover rate of total assets. The improvement of the net profit rate of sales and the turnover rate of total assets will help to improve the return on total assets, thus improving the sustainable growth rate of enterprises and reducing the pressure on financing brought by the rapid growth of actual sales.

(B) the lack of growth of enterprises when the financial strategy

After an enterprise enters the mature stage from the growth stage, its actual growth rate may be lower than the sustainable growth rate. Under the condition of maintaining the normal operation scale, the enterprise will have surplus funds. When the enterprise is in the situation of idle funds and insufficient growth of surplus resources, it should adopt a defensive contraction financial strategy with low debt, low income and high distribution, and consider the following specific ways.

1, looking for new sales growth points.

In the mature period, enterprises should actively find a way out for the possible surplus funds, make full use of the abundant cash in the mature period to develop innovative products, upgrade the original products and adjust the product structure, so as to promote the future sales growth of enterprises.

2. Increase the dividend rate.

According to the principle of financial management, if the expected income (rate) of the project that can be invested in the future is lower than the minimum income (rate) acceptable to shareholders, the net profit of the enterprise should be returned to investors in cash to show respect for shareholders' personal investment wishes and protect shareholders' rights and interests.

Therefore, when an enterprise has a large cash surplus and can't find any investment projects with higher returns, it is rational to increase the dividend for shareholders, that is, to increase the dividend rate, which can not only solve the idle financial resources of the enterprise, but also better safeguard the shareholders' rights and interests.

3. Reduce financial leverage.

When an enterprise's debt ratio is high, it will face greater financial risks. When an enterprise enters a mature stage, it can use the remaining financial resources to repay part of its debts, appropriately reduce the debt ratio, that is, reduce the financial leverage and optimize the debt structure, so as to control the financial risks of the enterprise.

4. Find a way out of funds.

For mature enterprises, we can try to find a way out for the remaining funds by means of mergers and acquisitions. Enterprises can choose other enterprises that have just entered the growth period as the M&A target, because the sales of enterprises entering the growth period will increase substantially, and it is urgent to increase investment and expand market share. At this time, there may be a shortage of cash, and their desire for funds will become stronger. Merger and acquisition of enterprises can not only successfully find a way out for surplus funds, but also narrow the gap between actual growth and sustainable growth, and continuously promote the development and sustainable growth of enterprises.

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