Research on the Financial Sustainable Growth of the Listed Companies on GEM

Abstract

Currently high risk assumed by a listed company on GEM makes numerous operators, investors and creditors pay close attention to the sustainable growth ability of an enterprise. In view of this, this paper makes an empirical analysis on the current status of the financial sustainable growth of the listed companies on GEM and the main factors that might affect their sustainable growth separately through the Wilcoxon signed ranks test and the factor analysis. The research result turns out that the listed companies on GEM have failed to achieve the financial sustainable growth with its actual growth rate greater than the sustainable growth rate to indicate an excessive growth. Meanwhile since the factors that influence the enterprise sustainable growth include the profitability, the cash-generating ability, the debt paying ability, the operation capacity and the growth ability, then the managers should take the following measures to achieve the financial sustainable growth of the enterprise through the cost control, the reinforcement of cash management, the cultivation of core competence, the optimization of the capital structure and the enhancement of the management level etc.
Key words: Listed companies on GEM; Financial sustainable growth; Empirical analysis