Dissertation > Economic > Economic planning and management > Enterprise economy > Corporate Financial Management

Study on the relationship between the listing Corporation's financial strategy management and profitability

Author QiShuo
Tutor ZuoJingHuai
School Capital University of Economics
Course Business management
Keywords Listed company Financial strategyProfitability Regression analysis
CLC F275
Type Master's thesis
Year 2012
Downloads 200
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Financial strategic management has always been playing a vital role in monitoringand allocating internal and external resources for listed companies in pursuit of healthyoperation, whereas profitability is fairly essential for their long-term development.Therefore, it is of crucial significance for listed firms to develop effective financialstrategies straightly pertaining to profitability by precisely researching out the relationshipbetween them.This research thesis, which is conducted through statistical regression analysis of realdata of200listed firms in Australian ASX200, aims at having a deep insight to the nexusbetween financial strategies and profitability of listed companies. The scope of thiscreative study comprehensively extend to all aspects of financial strategies and profitabilityin terms of financing strategy, investment strategy, working capital strategy as well asdividend distribution strategy, rather than a narrow area. Additionally, typical data analysissoftware like EXCEL and Statplus are applied to improve the accuracy and reliability ofthe results.As is reflected in the consequences, firstly, the debt proportion of capital structure inthe financing strategy of listed companies has obviously positive interrelation with theirprofitability. Secondly, short-term financing strategy with larger current assets or lowercurrent liabilities obstructs the growth of profitability. Thirdly, extensional investmentstrategy focus on increasing investment can rarely strengthen profitability, which is alsoapplicable to working capital strategy stressing on its turnover efficiency. Last but not least,favorable dividend strategy scarcely affects actual profitability but can indirectly serve itsgrowth by boosting the flexibility of financing strategy. The conclusion above indicatesthat listed companies can improve their profitability by concentrating on instantlyoptimizing capital structure and dividend distribution methods, which could be a valuablereference for domestic listed firms in our country.

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