In order to better understand the reason why domestic listed companies choose issuing convertible bonds when raising external capital, and what are the differences between the companies which offer convertible bonds and common stock,this paper uses some kinds of statistical analysis methods,mainly descriptive statistics and regressing statistics,and also make use of the financial data from 2000 to 2004 in Chinese security market.It gives an empirical interpretation on domestic listed companies' convertible bonds issuing when an external financing is unavoidable by analyzing the cash flow of the sample companies.The finding is that the listed companies that offering convertible bonds are more financially healthy and having better cash flow.