Impact of Different Leverage Ratios on the Development Status of the Company

Naitian Fan, Jiayi Wang and Yan Wang ()
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Naitian Fan: Xianda College of Economics and Humanities
Jiayi Wang: Shandong University of Finance and Economics
Yan Wang: China Agricultural University

A chapter in Proceedings of the 2023 2nd International Conference on Economics, Smart Finance and Contemporary Trade (ESFCT 2023), 2024, pp 47-54 from Springer

Abstract: Abstract Nowadays, real estate is an integral part of the national economy and plays an important role in various aspects. Contemporarily, with fast growing economy, real estate companies often lead to high leverage and high debt due to the size of their capital and operational risks. However, with the adjustment of national policies, the development of low leverage and deleveraging is encouraged. In this study, we will take Evergrande Group and Huarun as examples to explore the differences in the development paths as well as routine of companies under different leverage models and the reasons that lead to the different development outcomes. Overall, these results explore the different impacts of different leverage models on the companies and further explore measures related to the healthy operation of the companies, which can play a positive role in the healthy development of the real estate industry as well as shed light on guiding further exploration of real estate industry.

Keywords: Real estate companies; high leverage; low leverage; Evergrande Group; China Resources Land (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-268-2_7

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DOI: 10.2991/978-94-6463-268-2_7

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