Dezhou Tianen Animal Husbandry Co., Ltd. is a company with animal husbandry as its main business, with huge assets and heavy debts, and there are certain problems in the capital structure. This article analyzes and optimizes the company's capital structure to improve the company's financial position and profitability. In terms of capital structure analysis, this paper mainly analyzes the current situation of capital structure, debt structure and equity structure. Through the analysis, it is found that the company has the problem that the proportion of short-term debt is too high, and the proportion of long-term debt and shareholders' equity is too low, which may lead to an increase in the company's financial risk and affect the company's future development. In addition, the company's profitability is unstable and its future development prospects are uncertain, and the capital structure needs to be further optimized. In response to these problems, this paper proposes a series of optimization measures, including increasing the proportion of long-term debt financing, increasing the proportion of shareholders' equity, and formulating appropriate financial strategies. As long as enterprises can actively take measures to optimize their capital structure, improve their financial position and profitability, and improve their corporate governance mechanisms, they can achieve a virtuous cycle and achieve sustainable development.
Keywords: capital structure; short-term debt; long-term debt; Shareholders' equity.
Chapter 1 Introduction 1
1.1 Background 1
1.2 Purpose and Significance of the Study 1
1.3 Current status of research at home and abroad 2
1.4 Research Methods and Technical Routes 4
Chapter 2 Overview of Texas Tianen Animal Husbandry Co., Ltd. 6
2.1 Company Profile 6
2.2 Financial Condition of the Company 6
Chapter 3 Analysis of the current situation of the capital structure of Dezhou Tianen Animal Husbandry Co., Ltd. 8
3.1 The Concept and Role of Capital Structure 8
3.2 Analysis of the current state of the capital structure 8
3.3 Liability Structure Analysis 9
3.4 Equity structure analysis 10
Chapter 4 Problems in the Capital Structure of Dezhou Tianen Animal Husbandry Co., Ltd. 11
4.1 Excessive short-term debt 11
4.1.1Definition of short-term debt and its characteristics 11
4.1.2The impact of a high proportion of short-term debt 11
4.1.3 Reasons for the high proportion of short-term debt 12
4.2 Long-term debt and shareholders' equity are too under-represented 12
4.2.1 Analysis of specific causes 12
4.2.2Impact analysis 13
Chapter 5 Dezhou Tianen Animal Husbandry Co., Ltd. Capital Structure Optimization Suggestions 14
5.1 Increase the proportion of long-term liabilities and shareholders' equity 14
5.1.1. Increase the proportion of long-term liabilities 14
5.1.2. Increase the proportion of shareholders' equity 15
5.1.3. Introduce new financing methods such as venture capital and financial support 15
5.1.4. Strengthen financial risk control and establish a sound financial supervision mechanism 16
5.1.5Develop an appropriate financial strategy 16
5.2 Reducing the proportion of short-term liabilities 17
5.2.1. Increase the proportion of long-term debt financing 17
5.2.2Optimize working capital management 17
5.2.3Improving profitability 17
5.2.4Management of short-term liabilities 18
5.3 Optimizing the capital structure 18
5.3.1. Increase the proportion of share capital 18
5.3.2Optimizing the debt-to-capital ratio 19
5.3.3. Optimize the ratio of equity capital 19
5.3.4Dynamically balanced capital structure 19
Chapter VI Conclusions 20
Ref. 22
Capital structure is an important part of an enterprise's financial management, and it is one of the important factors that determine an enterprise's financial risk and business strategy[1]. A reasonable capital structure can reduce the operating risk of the enterprise, improve the financing efficiency of the enterprise, and promote the development of the enterprise. Since capital structure has a great impact on enterprises, the study of capital structure has always been highly valued. With the continuous development of the market economy, the number of enterprises is increasing, and the competition between enterprises is also intensifying, and the optimization of capital structure has become one of the necessary means for the development of enterprises [2].
Objectives: For Texas Tianen Animal Husbandry Co., Ltd., optimizing the capital structure is the key to the company's future development. The purpose of this paper is to help enterprises adapt to the changes in economic development and better achieve the strategic goals of enterprise development through the analysis and optimization of the company's capital structure. The research objectives of this paper mainly include the following aspects:
Clause. 1. Understand the development status and internal management of Dezhou Tianen Animal Husbandry Co., Ltd., and analyze the problems and deficiencies in the capital structure.
Clause. 2. Understand the capital structure of other companies in the industry, analyze the distribution pattern of capital structure in the industry, find excellent cases in the industry and explain their advantages.
Clause. 3. Analyze the market demand and the strategic objectives of the company's development, and scientifically plan and optimize the capital structure.
Clause. Fourth, put forward the optimization plan for the capital structure of Dezhou Tianen Animal Husbandry Co., Ltd., including increasing the proportion of equity capital, optimizing the structure of debt capital, introducing external investment, and improving idle assets. These options will be analysed in detail in subsequent sections.
Through the analysis and optimization of the capital structure, the financial risk of the enterprise can be reduced, the financing efficiency and profitability of the enterprise can be improved, and the long-term stable development of the enterprise can be ensured. At the same time, a good capital market environment will be formed in enterprises and industries, providing a wider range of channels and broad space for the development of enterprises.
Capital Structure Concept.
Capital structure refers to the proportional relationship between the financing method and the capital composition of an enterprise. Generally speaking, the financing methods of a business include debt financing and equity financing, while the capital composition includes debt capital and equity capital. The rationality of the capital structure has an important impact on the operation and development of enterprises.
The capital structure of a company can be measured by different indicators, such as the asset-liability ratio, equity ratio, debt ratio, liquidity ratio, etc. Among them, the asset-liability ratio refers to the ratio of the total liabilities to the total assets of the enterprise; Equity ratio refers to the ratio of shareholders' equity to total assets; The debt ratio refers to the ratio of the total debt of the enterprise to the equity of shareholders; The liquidity ratio refers to the ratio of a company's current assets to its current liabilities. These metrics can help companies assess the strength of their capital structure and take appropriate optimization measures.
The capital structure of an enterprise not only affects the financing cost and financial risk of the enterprise, but also affects the shareholders' equity and business strategy of the enterprise. Therefore, enterprises should reasonably design and optimize their capital structure according to their own characteristics and development needs.
The type of capital structure.
According to the ratio of corporate debt and equity financing, the capital structure can be divided into three types: conservative, conservative and aggressive.
1) Stable capital structure: Stable capital structure refers to the situation in which the ratio of debt and equity financing of enterprises is relatively balanced. This kind of capital structure is relatively stable, which can balance the financing cost and financial risk of the enterprise, and is suitable for the situation of large scale and stable development of the enterprise. A robust capital structure can increase a company's creditworthiness and market value, which can help attract investors and obtain more financing opportunities.
2) Conservative capital structure: Conservative capital structure refers to the situation where the proportion of debt financing is low and the proportion of equity financing is high. This kind of capital structure can reduce the financial risk of the enterprise, but at the same time, it will also limit the financing channels and development space of the enterprise. A conservative capital structure is suitable for situations where companies are small and the industry is risky.
3) Aggressive capital structure: Aggressive capital structure refers to the situation where the proportion of debt financing is high and the proportion of equity financing is low. This capital structure can increase the company's financial leverage and return on shareholders' equity, but it also increases the company's financial risk and debt burden. Aggressive capital structures are suitable for companies with large scale and stable earnings, but care needs to be taken to control debt levels and risk levels.
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