Measurement of the Reasonable Leverage Level in China's Power Industry

The power industry is a typical industry with a high leverage ratio. The article takes 51 listed companies in the power industry in China as the research object, uses financial data from the first quarter of 2016 to the fourth quarter of 2020 as observations, and uses operating performance as measurement indicator to measure the reasonable level of industry micro-level leverage, and tries to provide more accurate guidance for the power industry's deleveraging activities, so as to promote its goal of reducing leverage, stabilizing leverage, and optimizing leverage, thereby achieving high-quality and stable development of China's power industry. Through empirical research such as panel regression and panel threshold regression, it is found that the reasonable threshold of the leverage ratio of the power industry is 44.66%, and there is an "inverted U" relationship between the leverage ratio of the power industry and operating performance. Based on the research conclusions,several suggestions are put forward:1.Appropriate debt management and optimization of debt methods;2. Intensify supply-side structural reforms to improve industry efficiency.