The Empirical Study of Financing Strategies of Small- and- Medium Firms- A Case Study in Taiwan

• Main Authors: Wan-Ting Liao, 廖婉廷
• Other Authors: S.-Chyi Doong
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/67628732074471023797

碩士 === 逢甲大學 === 經營管理碩士在職專班 === 97 === 　　In business management, difficult tasks and challenges are frequently encountered; particularly, in finance managers’ financing strategies for cap- ital logistics such as the business cycle being positively related to a firm’s credit rating and financing strategy implementations. In addition, financial strategy related tools should be considered when formulating sustainable financing strategies. 　　When a firm undergoes business cycle expansion, a large amount of cash is needed to help it survive the economic downfall. In addition, the firm should demonstrate flexibility in its financial structure and improve the managerial undertakings. Due to the rapid shrinkage of market econ- omies and business stagnancy following the global financial tsunami in 2008, only firms that exercise risk control and financial strategic adjust- ment will stand a chance. 　　After Miller and Modigliani (1958) proposed the MM Theory and Myers (1984) proposed the Pecking Order Theory, experts and resear- chers began undertaking empirical studies. In this research, the study subject is a small and medium firm (case study) and the purpose of the research is to probe into the effects of the business cycle when formu- lating financial strategies through literature reviews and empirical anal- ysis. The empirical 6 results are summarized as follows: 1. The pecking order of the case study’s financing: debt financing in the firm, internal capital, and issue of ordinary share capital. 2. In terms of the case study’s financial strategies, the investment strategies prioritized over dividend strategies do not necessarily coincide with the pecking order theory and targeted capital structure; the optimal debt capital structure is insignificant. 3. When a firm seeks financing through external sources, debt financing is prioritized depending on the capital cost before issue of ordinary share capital. 4. The case study’s funding sources: long-term funding (private funding) and short-term funding (loans from financial institutions and borrow- ing from private entities) 5. The order of the problems encountered by the case study: financial reports that attribute to credit rating (financial factors/non-financial factors), inadequate revenues, sales turnover decline, and undesirable profit-making. 6. The order of factors attributing to the case study’s financing decision: business cycle, whether revenues meet expectations, credit rating, capital cost, asset-backed securities, right of management, and valuable consideration.