The Research On Financial Risk Control In Chinese Institutions Of Higher Learning

With the rapid development of tertiary education and the enlargement of the scale of enrollment by institutions of higher learning (hereafter IHLs), new situations arise in the financial management of IHLs along with some looming financial risks. As a result, the biggest theoretical and practical problem confronting the financial management of IHLs is to make a thorough, systematic, and efficient survey of the financial risks of IHLs and give a systematic study of the Evaluation Index System for the financial risks of IHLs to evaluate the potential risks and give early warnings so that the potential risks in the financial function of IHLs could be understood accurately, reliably and in time.Through research and analysis, this thesis finds out three kinds of financial risks of IHLs: financing risks, investment risks, and the risk of overall unbalance in financial situations. The manifestations of each of these risks are approached from different perspectives and the subjective and objective causes of these risks are discussed to explore the negative effects of the financial risks on the development of IHLs to safeguard the normal operation and benign circulation of the financial function of IHLs. Considering the situations of financial function of IHLs and adopting the Importance Principle, a financial risks evaluation system is established with 12 index including asset-liability ratio, asset-cumulative loan ratio to analyze empirically the situations of the financial situations of two IHLs whose financial information are gathered from their financial statements with the Analytical Hierarchy Process in order to find out the degree of financial risks they are in. Using the methods of univariate analysis, qualitative analysis and composite average method, this thesis also proposes an early-warning line for each index in the financial risk evaluation system. The degrees of financial risks of three IHLs are analyzed and risk warnings are given for these three schools to ensure the continuous, stable and lucrative function of their asset with the lowest cost.Lastly, some measures and suggestions are put forward to prevent the financing risks, investment risks, and the risk of overall unbalance in financial situations, and the directions are pointed out for IHLs to work on the prevention of potential financial risks. IHLs are urged to institutionalize the preventive mechanism of financial risks, to rationalize the decision making on investments, to normalize the process of decision making, and to minimize the risks of financial function.This thesis states that the healthy and stable development of IHLs should be based on the stable financial function which demands reasonable financial risks controlling. Consequently, it is of practical significance to confront the financial risks of IHLs and to study and analysis the measures of the prevention of financial risks.