Paper Keywords: financing risk capital structure prevention measures
Financing risk is one of the important risks related to the survival and development of enterprises in the market economy environment. All kinds of enterprises are facing financing risks to varying degrees, which can be used for reference by enterprises. Proper application and control can bring benefits to enterprises, while improper control will bring losses and even disasters to enterprises. Therefore, financing risk analysis is particularly important, starting with the analysis of the causes of financing risk, focusing on building a financing risk prevention system.
In China, almost all enterprises, especially state-owned enterprises, are generally short of capital, but it is extremely limited to raise funds through self-accumulation. Therefore, it is necessary to borrow some funds through debt to maintain business activities, that is, debt management. This will lead to certain risks. The existence of enterprise financing risk has its objective inevitability, which determines that financial management must use various effective means and measures in the process of financing. Strengthen the control and handling of risks, and adopt different methods to avoid their risks according to different types of financing risks.
1 the meaning and characteristics of financing risk
1. 1 the meaning of financing risk
Enterprise financing risk, also known as financial risk, refers to the uncertainty of financial results brought by enterprises borrowing funds. The main purpose of general enterprise financing is to expand the scale of production and operation, improve economic benefits, and thus achieve financial management goals. In order to obtain more economic benefits, enterprises will inevitably increase the financing burden of repaying principal and interest on schedule. Due to the uncertainty of enterprise capital profit rate and loan interest rate, enterprise capital profit rate may be higher or lower than loan interest rate.
1.2 financing risk characteristics
1.2. 1 objectivity. Fund-raising risk is rooted in the internal and external environment of enterprises and some unpredictable or uncontrollable factors, which are objective, and determine that the fund-raising risk of enterprises does not shift from human will but exists objectively under the condition of market economy. In other words, the existence of risks is unavoidable and can only be dealt with by various means and methods, so as to reduce or avoid the occurrence of costs and losses.
1.2.2 Uncertainty. Financing risk is variable under certain conditions and within a certain period of time, that is, whether it happens, when and where it happens, its scope and influence are accidental and uncertain results.
1.2.3 controllability. Financing risk is uncertain, but its occurrence is not a pure "accident", but there are certain rules to follow. Enterprises can use certain technical methods to predict the occurrence time, scope and degree of possible financing risks according to the statistical data of similar events in the past and other relevant information, and take relevant measures to prevent and control them.
1.2.4 duality. Financing risk has two sides, which can not only bring financial leverage income, but also trigger financing risk. This is a double-edged sword. Moreover, risks are directly proportional to benefits. The greater the risk, the higher the income, and the smaller the risk, the lower the income.
2 the impact of financing risks on enterprises
2. 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.
2.2 Excessive debt reduces the ability of enterprises to refinance.
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 Precautionary measures for fund-raising risks
3. 1 Establish a correct risk concept and establish a preventive mechanism.
Establish a financial "prevention" mechanism and correctly grasp the "degree" of corporate debt management. Enterprises should consider the scale and solvency of enterprises when making debt management decisions. To establish the "diagnosis" mechanism of enterprise financial early warning, it is necessary to analyze the debt situation of enterprises from three aspects: first, debt management is conducive to improving the performance of operators, enabling enterprises to obtain the capital effect of debt, reducing the cost of capital and improving the income level of equity capital. Second, debt management can quickly raise funds, make up for the lack of internal funds and enhance economic strength. Third, debt management brings greater risks and bankruptcy crisis to enterprises. Therefore, when establishing enterprise financial early warning system, we should grasp the "degree" of debt management. Estimate the amount of funds that may be raised, and arrange the production and operation activities of the enterprise accordingly, so as to organically link the production and operation of the enterprise with the fund raising, avoid the difficulty of capital turnover caused by the disconnection between the two, and prevent the fund raising risk of the enterprise.
3.2 Maintain and improve asset liquidity
Enterprises can decide the scale of current assets according to their own business needs and production characteristics, but in some cases, they can take measures to improve the liquidity of assets relatively. In the process of reasonably arranging the structure of current assets, enterprises should not only determine the ideal cash balance, but also improve the quality of assets. Always keep the liquidity of assets not lower than the alert level. This paper analyzes and studies the financing scheme through cash maturity debt ratio (net operating cash flow, current maturity debt), total cash debt ratio (net operating cash flow: total liabilities) and cash current debt ratio (net operating cash flow to current liabilities). The higher these ratios, the stronger the ability of enterprises to bear debts.
3.3 Study the trend of interest rate and exchange rate, and arrange financing reasonably.
When the interest rate is at a high level or in the transition period from high to low, raise as little as possible, and try to use floating interest rates for the funds that must be raised. When the interest rate is at a low level, financing is more favorable, but excessive financing should be avoided. When financing is unfavorable, try to raise as little as possible or only short-term funds that are urgently needed for operation. When the interest rate is in the transition period from low to high, we should raise long-term funds according to the capital demand, and try our best to keep the capital cost low by using the interest-bearing method with fixed interest rate. In addition, due to economic globalization, capital flows freely internationally, international economic exchanges are increasing, and exchange rate changes have an increasing impact on corporate financial risks. Therefore, enterprises engaged in import and export trade should adjust their financing plans in time according to the change of exchange rate.
3.4 Financing strategy from the inside out
Endogenous financing refers to the source of funds formed by depreciation of fixed assets and amortization of intangible assets and the source of funds increased by generating retained earnings. If an enterprise needs funds, it should follow the financing order of internal financing before external financing and debt before stock financing, that is, internal financing should be considered first, and then external financing should be considered; In external financing, debt financing should be considered first, then equity financing should be considered. Whether the self-owned capital is sufficient reflects the strength of the enterprise's profitability and ability to obtain cash. The more abundant its own capital, the more stable its financial foundation and the stronger its ability to resist financial risks. More self-owned capital can also increase the flexibility of enterprise financing. When enterprises face good investment opportunities and external financing constraints are harsh, if they have sufficient self-owned capital, they will not lose good investment opportunities.
3.5 Establish a risk forecasting system
Enterprises must establish a sound risk prevention mechanism and market-based financial information network, timely predict and prevent financial risks, monitor the form and state of development, quantitatively measure the critical point of financial risks, and timely reflect possible or existing changes that are inconsistent with expectations. Make a risk avoidance plan suitable for the actual situation of the enterprise, spread the risk through a reasonable financing structure, such as making full use of the principle of financial leverage to control the debt ratio, so as to control the investment risk; Select the financing portfolio with the lowest total capital cost by using the comparison method of total capital cost, and analyze the cash flow to ensure that the funds needed to repay the debt are sufficient; By controlling the operation risk, the fund-raising risk can be reduced, so that enterprises can organize production and operation according to market demand, adjust product structure in time, continuously improve the profitability of enterprises, avoid financial crisis caused by decision-making mistakes, and minimize risks.