Research On Enterprise Investment Risk And Evaluation

Risk is an objective reality which exists widely. With the market becoming more mature and the global economy merging into an organic whole quickly, the dual nature becoming more and more obvious. Risk can increase the profits of an enterprise , at the same time, it may also bring about additional loss. The co-existence of risks and opportunities is one of the characteristics of the market economy, so more attention has been paid to the evaluation and management of the risks. Any investments has to face the future, the uncertainty of the future will bring about risks for investments. That's to say, investments may give investors not only opportunities and profits but also loss. But nowadays, investors have vague concept to the risks of investments, their consciousness for risks is not strong and investors havn't attached adequate importance to the evaluation of risks, such evaluating methods of investing risks as expectation value and variance are very traditional. As for some complicated investing projects, these traditional methods cant evaluate correctly how much the risk of the investing projects is. For this reason, effective risk precautions can't be made, which will lead to a wrong investment or failure for an enterprise. So the society and enterprises will suffer loss, This essay puts forward the following risk evaluating methods: Break-even Analysis, Sensitivity Analysis and Gray System Theory in order to evaluate the risks of investing projects correctly and improve the investing profits ratio of an enterprise.This essay is composed of four chapters. The first chapter is based on the relationship of the uncertainty and risks, introduces the basic concepts and characteristics of risk theoretically; The second chapter discusses the meaning of the enterprise investing risks and why they are produced, and introduces the characteristics of investing risks of differentmarket types systematically; The third chapter tells about theevaluating purpose, principles and steps of enterprise investing risks, discusses systematically the principles and methods of the enterprise investing risks The forth chapter takes Huangshi ShuangFeng Cable incorporation Ltd. as an example, discusses the practical application of all kinds of evaluating methods of investing risks, and try to compare the advantages and disadvantages of each kind of evaluating method. Combing my own experience in teaching and research, I put forward the systematic model for comprehensive evaluation for enterprise investing risks.