Negative influence of debt management on enterprises
1. Debt management increases the financial risk of enterprises. Enterprises operating in debt must ensure that the investment income is higher than the cost of capital, otherwise there will be losses or losses, reducing the solvency. Under the condition of constant liabilities, the more losses, the lower the solvency of enterprise assets and the greater the financial risk. Excessive debt increases the financing risk, which not only needs to pay huge interest, but also reduces the safety and competitiveness of enterprises, endangers their survival and development, and eventually goes bankrupt because of their inability to repay debts. The ultimate financial risk is that the remaining property after bankruptcy liquidation is not enough to pay off debts.
2. Excessive debt reduces the refinancing ability of enterprises. Excessive debt of enterprises leads to excessive debt burden. When an enterprise's debt is due, it will affect its reputation if it cannot repay its principal and interest in full and on time. If it is a reputable enterprise, it is easy to raise new debts and pay off old debts; However, enterprises with bad reputation, financial institutions or other enterprises are unwilling to provide funds for this enterprise, and their refinancing ability is reduced.
3. The high debt ratio will lead to the stock market price falling. As far as joint-stock enterprises are concerned, the financial risks arising from debt management not only affect the owners' rights and interests, but also affect the market price of stocks. When the debt ratio exceeds the allowable range, the higher the debt ratio, the greater the risk of the stock, and its market price will inevitably fall.
4. It increases the operating cost of the enterprise and affects the capital turnover. Debt management of enterprises must repay the principal and interest on schedule, which increases the operating cost of enterprises on the one hand; On the other hand, if the repayment period is relatively concentrated, it will affect the turnover and use of enterprise funds if enterprises are required to raise huge funds to repay debts in a short period of time.
If enterprises don't want to be in debt, they have to find ways to make profits, and the way to make profits is financing, so preventing financing risks means preventing bankruptcy.
Debt management is one of the main management methods of modern enterprises, which will bring benefits to enterprises and become a favorable lever for economic development. But if it is used improperly, it will make the enterprise get into trouble and even push the enterprise to bankruptcy. Therefore, enterprises should fully understand the risks of debt management and must take measures to prevent the risks of debt management.
First, we must establish a sense of risk. Under the socialist market economy system, enterprises become independent commodity producers and operators with self-management, self-financing, self-restraint and self-development, and enterprises must bear risks independently. When an enterprise is engaged in production and business activities, due to changes in the internal and external environment, it will inevitably lead to deviations between the actual results and the expected results. If the enterprise is unprepared and helpless when the risk is imminent, it will inevitably lead to failure. Therefore, enterprises must establish risk awareness, that is, correctly identify risks, scientifically estimate risks, guard against risks and effectively deal with risks.
Second, establish an effective risk prevention mechanism. Enterprises must base themselves on the market, establish a perfect risk prevention mechanism and financial information network, predict and prevent financial risks in time, formulate a risk avoidance plan suitable for the actual situation of enterprises, and spread risks through a reasonable financing structure. For example, by controlling business risk to reduce financing risk and making full use of the principle of financial leverage to control investment risk, enterprises can organize production and operation according to market demand, adjust product structure in time, continuously improve their profitability, avoid financial crisis caused by decision-making mistakes, and minimize risks.
Third, it is necessary to determine an appropriate debt amount and maintain a reasonable debt ratio. Debt management can gain financial leverage benefits, and at the same time, enterprises have to bear the financing risk losses caused by debt. In order to avoid financing risks while obtaining financial leverage benefits, enterprises must achieve moderate debt red camp. Whether the debt management of an enterprise is appropriate refers to whether the capital structure of the enterprise is reasonable, that is, whether the debt ratio of the enterprise is suitable for the specific situation of the enterprise, so as to realize the optimal combination of risk and reward. In practical work, how to choose the optimal capital structure is complex and difficult. For some enterprises with good production and operation, marketable products and fast capital turnover, the debt ratio can be appropriately higher; For enterprises with poor management, poor production and sales and slow capital turnover, the debt ratio should be appropriately reduced, otherwise it will increase the financing risk on the basis of the original business risk. According to the statistics of relevant state departments, the assets and liabilities of Chinese enterprises are generally too high, generally around 70%, and some are above 80%. In order to enhance the ability to resist the changes of external environment, enterprises in China must supplement their own working capital and reduce the asset-liability ratio.
Fourth, we should make a debt financial plan according to the actual situation of the enterprise. According to a certain amount of assets of the enterprise, arrange appropriate liabilities according to needs and possibilities. At the same time, we should make a repayment plan according to the debt situation. If the debt is improperly borrowed and poorly managed, it will not be paid by the repayment date, which will affect the reputation of the enterprise. Therefore, in order to speed up the development of debt management, enterprises must strive to strengthen management, speed up capital turnover, reduce capital occupation, shorten production cycle, improve production and sales rate, reduce accounts receivable, and enhance risk prevention awareness, so that enterprises can be cautious in debt on the basis of fully considering various factors affecting debt. When making a debt plan, we should make a repayment plan so that it has certain repayment guarantee. The quick ratio of the enterprise after debt is not less than 1: 1, and the current ratio is kept in a safe area of about 2: 1. Only in this way can we minimize risks and improve the profitability of enterprises. At the same time, it should be noted that when borrowing funds, long-term and short-term funds should be arranged reasonably according to needs, so that their structure tends to be reasonable and the repayment period is prevented from being too concentrated.