Nowadays, the development speed of market economy presents a very rapid development trend. In order to adapt to the development of market economy, the fundamental foothold is to strengthen the financial risk management of modern enterprises. The following is my financial risk index analysis paper, I hope it will help you.

Corporate financial risks seriously affect the healthy development of corporate credit institutions, securities investors and even the whole country. How to take certain measures to prevent and manage the financial risks existing in enterprises has become an important topic. Based on the definition and characteristics of financial risk, this paper analyzes the causes of financial risk from the macro environment and the enterprise itself, and discusses the preventive measures of financial risk.

Keywords: enterprise; Property risk; Analysis; counter-measure

Financial risk runs through the whole process of enterprise management, and with the increasing internationalization of economic environment, the financial environment of enterprises is becoming more and more complex and changeable, and the financial risks faced by enterprises are increasing day by day. Over the past 40 years, corporate financial risks have seriously affected the healthy development of enterprises, credit institutions, securities investors and even the whole country. Every year, corporate bankruptcies occur frequently all over the world, and many large group companies fall into financial difficulties, which has a great impact on the social and economic development of enterprises and even the whole country. There are many reasons for this situation, but one of the important reasons is that enterprises are always facing the threat of financial risks. Therefore, the research on the understanding, prevention and control of financial risks has become an important topic facing enterprises today.

1. Characteristics of financial risks

Only by fully understanding the basic characteristics of financial risks can we take effective measures to prevent and control them in time. As the saying goes, know yourself and know yourself. The same is true of financial management. To reduce the company's financial risk, we must fully understand the characteristics of financial risk and take effective prevention and control on the basis of mastering the characteristics. The characteristics of financial risk mainly include objectivity, comprehensiveness, uncertainty, profit and loss and incentive.

1. 1 objectivity

In other words, financial risks exist objectively regardless of human will. In other words, risks are everywhere, and people can't avoid and eliminate them. They can only deal with risks through various technical means, so as to avoid the occurrence of expenses and losses. There are two possible outcomes of enterprise financial activities, namely, achieving the expected goal and failing to achieve the expected goal, which means that the risk of failing to achieve the expected goal exists objectively.

1.2 comprehensiveness

That is, financial risk exists in the whole process of enterprise financial management and is reflected in various financial relationships. Financial activities such as fund raising, fund utilization, fund accumulation and distribution will all produce financial risks.

1.3 uncertainty

Financial risk has certain variability, that is, it may or may not occur under certain conditions and within a certain period of time. This means that the financial situation of the enterprise is uncertain, which makes it possible for the enterprise to suffer losses at any time.

1.4 profitability or loss

Risk is directly proportional to income, that is, the greater the risk, the higher the income, and the smaller the risk, the lower the income. The existence of financial risks urges enterprises to improve management and improve the efficiency of capital utilization. So it can be said that profit and loss are * * *. In Chinese enterprises, due to various factors and conditions, financial risks will also affect the continuity of production and business activities, the stability of economic benefits and the safety of survival, and may eventually threaten the profits of enterprises, thus affecting the profits of enterprises.

1.5 reward

That is, the objective existence of financial risks will prompt enterprises to take measures to prevent financial risks, strengthen financial management and improve economic benefits.

2. The causes of enterprise financial risk

With the development of global economy, the arrival of the era of integration and the sweeping of knowledge economy, China enterprises are facing increasingly fierce competition in the economic environment, and the laws of market economy are more obvious. In this environment, the production, operation and financial management of enterprises are facing such great risks. The financial risk of an enterprise is caused by the macro-environment and the enterprise itself.

2. 1 Macro environmental impact

2. 1. 1 global integration

Since 200 1 China joined the WTO, our domestic enterprises need to enter the world market and compete for market share with large enterprises all over the world. In this process, the external environment faced by enterprises becomes very complicated, and frequent and complicated transnational investment between enterprises makes investment activities face great risks.

2. 1.2 Formation of buyer's market

Under the background of rapid economic growth, consumers' preferences vary from person to person and change rapidly. Therefore, the production of enterprises must be closely consistent with the preferences of consumers. In the buyer's market, enterprises must arrange production according to market demand and adapt to market changes in order to truly reduce their financial and operational risks.

2. 1.3 the arrival of the information age

In the information society, with the networking and virtualization of economic activities, the speed of information dissemination, processing and feedback will be greatly accelerated. If the internal and external information disclosure of the enterprise is not sufficient, timely or even accurate, or the competent department of the enterprise cannot choose to make timely and effective use of the internal and external information, this will inevitably increase the decision-making risk of the enterprise.

2.2 Enterprise's own reasons

2.2. 1 enterprise managers have a weak sense of risk.

Where financial risks exist objectively, as long as there are financial activities, there are risks. In reality, the lack of objectivity and risk awareness of financial personnel is an important factor for the risk. For example, in practice, the risk of accounts receivable is related to the weak risk awareness of enterprises.

2.2.2 The capital structure of the enterprise is unreasonable.

Capital structure mainly refers to the proportional relationship between equity funds and debt funds in all sources of funds of an enterprise. Unreasonable capital structure leads to a heavy financial burden and a serious shortage of solvency, resulting in insufficient liquidity of funds. As an important lifeline of an enterprise, the liquidity of assets is very important, which refers to the ability to convert assets into cash and maintain their purchasing power, and is also the direct cause of financial crisis, which should not be underestimated. Financial risk is closely related to the liquidity of assets. Lack of funds, inventory backlog and other issues are the performance of weak liquidity of funds, but also the fuse of the financial crisis. The financial risk caused by financing decision-making mistakes is also the embodiment of the unreasonable capital structure of enterprises.

2.2.3 Complexity of internal financial relations of enterprises

This is the most important reason. The confusion of internal financial relations of enterprises is an important reason for the financial risks of enterprises in China. There are unclear rights and responsibilities and confusion in the management and use of funds and the distribution of benefits between various departments within the enterprise and between the enterprise and the superior departments, which leads to inefficient use of funds and can not guarantee the safety and integrity of funds. The complexity of corporate financial activities is an important internal cause of corporate financial risks in China. Financial activities run through the whole process of enterprise activities and must be operated reasonably.

3. Precautionary measures against financial risks of enterprises

3. 1 Establish enterprise financial risk identification system and prepare cash flow budget.

In the process of development and growth, the scale of the organization is getting bigger and bigger, and the organizational structure is getting more and more complicated, which makes the management of the enterprise more complicated and changeable, and the financial risk is getting bigger and bigger. As the life "blood" closely related to the survival, development and growth of enterprises, cash flow plays an increasingly important role in enterprise management. Therefore, as an enterprise, we must pay full attention to the information of cash flow, effectively manage and control cash flow, and make its "blood" function play a normal role, which has become the focus of enterprise financial risk control. ? 3.2 Improve the level of financial decision-making and establish a financial early warning system.

3.2. 1 Establish short-term financial early warning system and prepare cash flow budget.

As the object of corporate finance is cash and its flow, in the short term, whether an enterprise can survive depends not entirely on whether it is profitable, but on whether it has enough cash for various expenses. To establish a short-term financial risk early warning system, the first step is to prepare a cash flow budget, mainly through cash flow analysis. Through cash flow analysis, we can fully reflect the dynamic cash flow of enterprises. When the business receivable items or inventory of the enterprise are greatly reduced, it shows that the enterprise has a good payment situation, a small backlog of products and a strong operating ability; On the contrary, when the net cash flow generated by an enterprise's operating activities is less than the net profit, investors should be highly vigilant. In this case, due to the substantial increase of accounts receivable and inventory, the operating ability of enterprises will decline, and it is also easy to form potential losses. Any imbalance of accounts receivable, accounts payable and inventory items will cause enterprise crisis, and these three items can be used as early warning sources of short-term financial risks. In order to accurately prepare the cash flow budget, enterprises should summarize the specific objectives, express the expected future income, cash flow, financial status and investment plan in quantitative form, establish a comprehensive budget of enterprises, predict future cash receipts and payments, and establish a rolling cash flow budget with weekly, monthly, quarterly, semi-annual and one-year cycles.

3.2.2 Establish a long-term financial early warning system and build a risk early warning index system.

Fundamentally speaking, the financial risk of an enterprise is caused by borrowing. For enterprises, it is necessary to establish both short-term financial early warning system and long-term financial early warning system. From the comprehensive evaluation of the economic benefits of enterprises, that is, profitability, solvency, economic benefits, development potential and other aspects to prevent financial risks.

From the analysis of the profitability of assets, the monitored indicators are: the total return on assets (the average total amount of assets in earnings before interest and tax), which indicates the profitability of each yuan of capital and reflects the profitability of enterprises using assets; The profit rate of cost (the total cost of operating profit) reflects that the higher the profit level of each yuan spent, the stronger the profitability of the enterprise.

From the analysis of solvency, the monitoring indicators are: current ratio (current assets and current liabilities), reflecting the liquidity of enterprise assets. The higher the ratio, the stronger the solvency; Asset-liability ratio, asset-liability ratio is generally 40 ~ 60%. When the return on investment is greater than the loan interest rate, the more loans, the more interest and the greater the financial risk.

From the economic benefit analysis, the monitoring indicators are: accounts receivable turnover rate and production and marketing balance rate, which reflect the asset operation indicators.

From the analysis of development potential, the monitoring indicators are: net cash rate of total assets = (net cash flow from operating activities+dividends or profit cash received+cash interest expense+income tax cash) average total assets; Net cash sales rate (net cash flow and net sales income from operating activities); Return on shareholders' equity (net profit average shareholders' equity).

3.3 Establish an effective financial risk management leadership system

As the saying goes, "water can carry a boat, but it can also overturn it." In any enterprise, the leadership of the enterprise is the pioneer and the initial carrier of corporate culture. As far as enterprise financial risk management is concerned, the ultimate director and interpreter depend on the leadership of the enterprise, and the cultivation of employees' execution also depends on the leadership of the enterprise. In addition, whether employees need leadership to guide and manage their understanding, comprehension and perception of corporate culture. Only with a well-run and effective leadership system can enterprises have a virtuous circle and their risk management can be effectively controlled and prevented. This is especially true for the financial risk management of enterprises. Only vertical effective management and horizontal effective control can achieve the optimal control of financial risks.

3.4 Improve the risk management organization and internal control system.

The complexity and diversity of enterprise financial risk management require enterprises to establish effective management. Only by organizing the financial risks of enterprises well can we pay enough attention to the financial risk management of enterprises and truly operate on a large scale. Enterprises can set up a separate financial risk management office, equipped with corresponding personnel to predict, analyze and monitor financial risks, discover and resolve risks in time, and establish and improve risk control mechanisms. In addition, the weakening of governance structure and internal control system is itself a manifestation of high risk. Therefore, we must first improve the corporate governance structure, improve the risk control ability, realize scientific decision-making and management, and form a complete decision-making mechanism, incentive mechanism and restraint mechanism. Secondly, it is necessary to establish a supervision and restriction mechanism, especially to strengthen authorization, supervision, budget management and internal audit. Thirdly, finance and accounting should be separated, and the leaders in charge of the unit should be separated, and management centers should be set up respectively, with their own responsibilities. Finally, we should give full play to the role of internal audit institutions and personnel, and do a good job in internal control review and risk assessment.

3.5 Cultivate and strengthen financial risk awareness

For an enterprise, it is particularly important to cultivate and strengthen the financial risk awareness of all employees from top to bottom. As the personnel of the financial management department of an enterprise, both ordinary employees and leaders should establish a strong sense of risk, so that the sense of financial risk can be reflected in all aspects of financial management. How can we strengthen the financial risk awareness of these relevant personnel? Financial managers should first have a solid foundation of financial knowledge, have the ability of financial analysis, be able to make timely and accurate judgment and analysis of financial risks, find problems in time, analyze problems and solve problems. Secondly, as a financial manager, we should have professional sensitivity, estimate and discover potential financial risks at any time, make judgments in time and propose solutions. Finally, professionals should infiltrate the awareness of financial risk into the details of daily work, so that other employees of the enterprise can also cultivate a strong awareness of financial risk and contribute to the safe and effective operation of the enterprise.

3.6 Strengthen enterprise financial risk control

In the face of financial risks, we usually adopt the strategies of avoiding risks, controlling risks, accepting risks and dispersing risks. Controlling risk is the core of enterprise financial risk management. To strengthen enterprise financial risk control, we should start from the following aspects:

3.6. 1 Financing risk control

Under the condition of market economy, fund-raising activities are the starting point of enterprise production and operation activities. Improper management measures will make the use efficiency of raised funds have great uncertainty, which will lead to the risk of raised funds. There are two main channels for enterprises to raise funds: one is owner's investment, such as capital increase and share expansion, after-tax profit distribution and reinvestment. The second is to borrow money. As for the borrowed funds, while gaining the benefits of financial leverage, enterprises borrow funds through debt management, which brings the possibility of losing their solvency and the uncertainty of income. There are several specific reasons for financing risk: the risk of increasing the financing cost of enterprises due to interest rate fluctuations, or raising funds above the average interest level. In addition, there are fund organization and scheduling risks, operational risks and foreign exchange risks. Therefore, the scale of debt management must be strictly controlled.

3.6.2 Investment risk control

After an enterprise obtains funds through fund-raising activities, there are three investment methods: first, investment in production projects, second, investment in the securities market, and third, investment in business activities. However, not all investment projects can produce expected returns, which leads to the uncertainty of reducing the profitability and solvency of enterprises. If the investment project can't be put into production on schedule, it can't be profitable, or although it can't be profitable, it will cause losses, which will lead to the decline of the overall profitability and solvency of the enterprise. Although there is no loss, the profit level is very low, and the profit rate is lower than the bank deposit rate in the same period; Or although the profit rate is higher than the bank deposit rate, it is lower than the current capital profit rate of the enterprise. When making investment risk decision, its important principle is not only to dare to make venture capital to obtain excess profits, but also to overcome blind optimism and adventurism and avoid or reduce investment risks as much as possible. What we should pursue in decision-making is the best combination of profitability, risk and robustness, or let the principle of robustness play the role of balancer between profitability and risk.

3.6.3 Risk control of capital recovery

The important link of financial activities is the recovery of funds. Accounts receivable is an important aspect of the risk of capital recovery, which accelerates the outflow of cash. Although the enterprise generates profits, it does not increase the cash of the enterprise. On the contrary, it will enable enterprises to advance unrealized profits and tax expenses with limited working capital and accelerate cash outflow. Therefore, the management of accounts receivable should be strengthened from the following aspects: first, establish a stable credit policy; Second, determine the credit rating of customers and evaluate the solvency of enterprises; Third, determine a reasonable proportion of accounts receivable; Fourth, establish a sales responsibility system.

3.6.4 Income distribution Risk control Income distribution is the last link of an enterprise's financial cycle.

Income distribution includes retained income and dividend distribution. Retained income is the source of expanding investment scale, and dividend distribution is the requirement of shareholders' property expansion, which are both interrelated and contradictory. If the enterprise expands rapidly and the scale of sales and production develops rapidly, it needs to acquire a large number of assets, and most of the after-tax profits are retained. However, if the profit rate is high and the dividend distribution is below a certain level, it may affect the stock value of the enterprise, thus forming risks in the income distribution of the enterprise. Therefore, we must pay attention to the balance between the two and strengthen financial risk monitoring.

4. Conclusion

To sum up, the financial risk of an enterprise exists in the whole operation process of the enterprise, and controlling the financial risk can improve the competitive position of the enterprise in the market and is conducive to the development of the enterprise; If we don't pay attention to the financial risks of enterprises, or make mistakes in financial risk analysis, it will seriously affect the development of enterprises.

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