The Comparison of Enterprise Financing Mode and Financial Leverage

Yu Jie Niu, Qian Dong


Enterprises need a lot of capital to expand business. Enterprises face many different financing way. Each financing ways have advantages and disadvantages. Enterprises should be combined with the actual situation, choose the appropriate means of financing to maximize their own economic interests. When an Enterprise has strong corporate profitability, debt financing should be selected and more profit can be getting by using of financial leverage. Therefore, the enterprise should arrange the various means of financing, company's liabilities size, duration, structure, solution to the financial leverage and corporate fund-raising effectiveness of financial leverage reasonably to achieve effective optimization.

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