How to optimize the internal financial management of enterprises, improve the level of financial management, prevent and reduce the financial risks of enterprises, is a major issue affecting the survival and development of enterprises, and also the key to the development of enterprises.
The analysis and prevention of financial risks The article introduces the performance of financial risks, and analyzes the reasons for the formation of financial risks. Finally, based on this, specific countermeasures are proposed.
I. Analysis and Prevention of Financial Risks-Performance of Corporate Financial Risks
The capital movement includes several links of capital raising, utilization, consumption, recovery and distribution. In summary, it is the three links of financing, investment, and profit distribution. These three links constitute the financial structure of the enterprise. According to the process of capital movement, corporate financial risks arise from the following links:
Different sources of funds and different funding methods will have different funding costs and corresponding risks. When raising funds, the company must weigh the risks and costs in order to choose the best funding method. The debt-to-equity ratio reflects the degree of financial leverage. The greater the financial leverage, the higher the return on equity, but the greater the corresponding financial risk. The optimal capital structure is obtained by weighing the benefits and risks and is suitable for the characteristics of the company. Capital Structure. In addition, strengthening the management of current liabilities can improve the use efficiency of short-term funds, reduce costs, and ensure daily production and operation needs. As the development of financial markets becomes more complicated, the constant changes in the financing decision-making environment and the increasing use of financial derivatives when companies make financing decisions will bring financial risks to enterprises.
B) 、 Investment
The company's investable current assets include cash, tradable financial assets, accounts receivable and inventory, etc., and the best choice must be made between liquidity and profitability. Too much investment in current assets can increase the liquidity of the fund, thereby increasing the company's liquidity and solvency, but it will reduce the company's profitability and affect the turnover of funds. Companies can also invest in long-term assets such as fixed assets and long-term securities. Large capital investment projects generally take years or even decades to implement planning and implementation. Due to the large amount of funds and the long time span, the future returns of investment projects are uncertain, with greater risks and uncertainties.
C), the operation of capital
At present, the proportion of inventories in Chinese enterprises' current assets is relatively large, and many of them appear as overstocked inventory. Poor liquidity of the inventory, on the one hand, occupies a large amount of funds of the enterprise, on the other hand, the company must pay a large amount of storage costs for the storage of these inventory, resulting in rising corporate costs and falling profits. In the case of long-term inventory, the enterprise must also bear the losses caused by the decline in market prices and losses caused by improper storage, resulting in financial risks. In accounts receivable management, it is common for enterprises to focus only on sales performance and ignore control over accounts receivable. In order to increase sales and expand market share, some companies use credit sales to sell products, resulting in a large increase in corporate receivables. At the same time, because the company did not know enough about the customer's credit rating during the credit sales process and blindly sold it, it caused the accounts receivable to run out of control. Assets have been occupied by debtors for free for a long time, which seriously affects the liquidity and security of corporate assets.