Keywords: debt structure, long-term liabilities and short-term liabilities
China Library Classification Number: F275 Document Identification Number: A
Article number:1004-4914 (2012) 09-256-02.
In recent years, the research on the capital structure of enterprises is very in-depth in the financial theory circle, while the discussion on the debt structure of enterprises is less. The author believes that whether the debt structure of an enterprise is reasonable has a great influence on the enterprise. Debt structure reflects the debt situation of enterprises, and adjusting the debt structure of enterprises is an important content of enterprise financial management. Under the situation that the asset-liability ratio of domestic enterprises is rising year by year and the characteristics of debt structure are constantly changing, studying the relevant laws of corporate debt structure can help enterprises improve debt financing structure, optimize debt management, improve the efficiency of capital use, strengthen the constraints on managers, reduce agency costs, help government departments make macro-control decisions and improve the operation of financial markets.
1. What is the debt structure?
(A) the definition of related concepts
Debt structure includes total debt structure, debt type structure and debt term structure. The overall structure of liabilities refers to the proportion of liabilities to the total capital of an enterprise. Debt type structure refers to the proportion of funds raised by enterprises through different financing channels. The term structure of liabilities refers to the proportional relationship between long-term liabilities and short-term liabilities used by enterprises in the production and operation process.
This paper will mainly study the term structure of liabilities.
(b) In-depth discussion on the term structure of liabilities.
The term structure of liabilities refers to the proportional relationship between long-term liabilities and short-term liabilities in the process of enterprise production and operation. The solvency of enterprises is a common concern of creditors and debtors. Whether the proportional relationship between long-term liabilities and short-term liabilities is reasonable has a great influence on the financial risk of enterprises. If the proportion relationship is unreasonable, it will not only cause the financial crisis of the enterprise, but also affect the value of the enterprise to a great extent.
1. Pay attention to short-term liabilities. The repayment pressure of short-term liabilities is great. From the repayment order of liabilities, it can be seen that enterprises must repay short-term liabilities first and then long-term liabilities; Long-term liabilities should be converted into short-term liabilities before maturity, which together with the existing short-term liabilities constitute the total liabilities that enterprises need to repay in the short term, forming the debt repayment pressure of enterprises.
Most short-term liabilities are relatively stable. In a normal production and operation enterprise, most short-term liabilities are often occupied and stable. For example, the funds occupied by the lowest raw material reserves in industrial enterprises and the lowest inventory reserves in products and commercial enterprises are generally short-term funds for a long time, although short-term liabilities are used to raise funds. The recovery of a short-term fund has certain regularity and needs to be included in the capital structure for research.
2. Weigh long-term and short-term liabilities. Cost of capital: Generally speaking, the cost of long-term liabilities is higher than that of short-term liabilities. Because the interest rate of long-term liabilities is higher than that of short-term liabilities; Long-term liabilities are inflexible. After an enterprise obtains a long-term debt, even if there is no capital demand during the debt period, it should not be returned in advance and can only continue to pay interest.
Financial risk: the financial risk of short-term liabilities is often higher than that of long-term liabilities, because: the maturity date of short-term liabilities is near, and it is easy to fail to repay the principal on time; Short-term liabilities are also uncertain in terms of interest costs. To use short-term liabilities to raise funds, it is necessary to constantly update liabilities. After the loan expires, the interest rate of the next loan is somewhat uncertain. To use short-term liabilities to raise funds, it is necessary to constantly update the liabilities, because the interest of short-term liabilities is very unstable in the financial market.
But short-term liabilities are easier and faster to obtain, while long-term liabilities are more difficult to obtain. Because creditors often have to bear large financial risks when providing long-term funds, it is generally necessary to conduct a detailed credit evaluation of the borrowing enterprise and specify the purpose of the loan. If something happens, they need certain assets as collateral.
Second, the importance of optimizing the debt structure
Enterprise debt structure is a part of enterprise capital structure, and debt structure decision-making is an important aspect of enterprise financing decision-making. Whether an enterprise has sufficient solvency depends not only on the stable cash inflow of the enterprise, but also on the reasonable arrangement of the debt term structure of the enterprise. When the total debt of an enterprise is fixed, the debt structure of the enterprise mainly refers to the debt term structure of the enterprise. Optimizing corporate debt structure decision-making is very important for achieving corporate financing strategic objectives, which is embodied in the following aspects:
1. The debt structure determines the total cost and risk of financing. Different debt structures will bring different financing risks and total costs. If the debt structure is reasonable, it will enable enterprises to obtain the funds with the lowest total financing cost with the minimum total financing risk. Enterprises must pay higher financing costs if they want to obtain funds with low financing risk; On the contrary, if the risk of obtaining some funds is high, enterprises can pay lower financing costs. It can be seen that for a single debt fund, it is difficult for enterprises to raise funds with lower capital cost with less financing risk. However, because different forms of debt structure will change the total cost and risk of financing, enterprises can integrate financing risks and reduce financing costs by optimizing debt structure.
2. Debt structure decision determines the degree of diversification of corporate liabilities and affects the maintenance and stability of existing liabilities. Debt structure decision restricts the choice and utilization of enterprise financing channels, and also affects the satisfaction of enterprise capital demand, because it is often impossible for enterprises to obtain full guarantee from a certain channel. If the debt structure is unreasonable, it may lead to insufficient effective supply of funds needed by enterprises.
3. Debt structure, especially short-term debt structure, has great influence on enterprise value. Short-term debt is the financing method with the greatest financing risk, but it is also the financing method with the lowest capital cost. Therefore, the proportion of short-term liabilities will inevitably affect the enterprise value. Studying capital structure is to reveal whether financial risk and capital cost are balanced by analyzing the proportional relationship between various funds. In the modern market economy, with the development of capital market and various financial instruments, short-term debt funds are more convenient to adjust the capital structure of enterprises because of their convertibility, flexibility and diversity. Therefore, to judge the value of an enterprise, we must consider the short-term debt structure of the enterprise.
4. Debt structure has a great influence on the financing ability and market competitiveness of enterprises. A reasonable debt structure is an important indicator affecting borrowing capacity. If the proportion of current liabilities is too large, the proportion of long-term liabilities is too small, the interest burden of enterprises is too heavy, and the short-term solvency is reduced, which will affect the financing ability of enterprises. On the other hand, a reasonable debt structure will also increase the market competitiveness of enterprises. For example, issuing a certain proportion of long-term and short-term bonds in the capital market will promote the competitiveness of enterprise products in the market, thus improving the reputation of enterprises.