A Study on the Effect of Deleveraging on the Efficiency of Company Fund Utilization: Taking Poly Real Estate Company as an Example

DOI: https://doi.org/10.62517/jbm.202409108

Author(s)

Qiufei Wang, Wenyu Zheng*

Affiliation(s)

School of Management, Shenyang Jianzhu University, Shenyang 110168, Liaoning, China *Corresponding Author

Abstract

In 2015, the Central Leading Group of Finance and Economics first proposed the concept of "supply side structural reform". "Supply side structural reform" has gradually become well-known to scholars, and relevant scholars have generated numerous discussions on the discussion of "supply side structural reform", such as the significance of relevant policy implementation. With the continuous promotion of supply side structural reform, the business scale of real estate companies has begun to shrink, no longer adopting the traditional expansion model, continuously reducing debt intensity, adhering to the national policy of deleveraging, and continuously reducing inventory and improving the efficiency of fund utilization. With the continuous progress of the "deleveraging" process, discussions among scholars on the relationship between the leverage level of real estate companies and the efficiency of fund utilization are also deepening. By conducting empirical research on Poly Real Estate Company and analyzing and elaborating on the relationship between the company's leverage level and fund utilization efficiency, it is concluded that the company's leverage level is negatively correlated with fund utilization efficiency. Thus, if the company's leverage level is low, the fund utilization efficiency is high, a high level of leverage in a company results in low efficiency in the use of funds.

Keywords

Real Estate Company; Supply Side Structural Reform; Fund Utilization Efficiency; Leverage Ratio

References

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