Solvency Analysis of Chinese Railway Construction Listed Companies

Abstract

Railway is not only related to transportation and business but also a basis of public’s living quality, getting government focused and policy supported. With the economy growing, railway construction business is focused by investors. Many firms have difficulties such as high asset-liability ratio, the great demand of financing and so on. Firms borrow a lot in order to solve financial problem. Therefore, there is a connection between solvency assessment and railway construction. This paper gather adequate literatures which have different solvency ratios then we select the ratios used frequently. In order to overcome the limitations of solvency ratios, some ratios are reformed. After that we use the original ratios to assess railway firms, then compare them with the improved solvency ratios to figure out if there is any substantial difference. Eventually, after a series of calculations and assessments, we provide with improvement strategies for corporations to promote solvency. The conclusions of this paper is meaningful.