Research On The Control Of Corporation's Financial Risk Based On Leverage Theory

Financial risk is the monetary manifestation of enterprise's risk. Financial risk, along with development of economy and competition between enterprises, has become more and more complex. Considering the influence of financial risk on operation of enterprises, the development of economy and the stability of society, the research on control of financial risk takes on remarkable importance. As the principal part of economy, limited company's business performance relates with strategic arrangement and growth situation of macroeconomic and microeconomic development. For the reference to other kinds of organization and enterprise, the thesis studies a variety of risks in run, analyzes and measures them with practical method and then researches methods on the control of corporation's financial risk.Leverage analysis method could be used to analyze and measure corporation's financial risk with a company itself as a research unit, it reflects sensitively changes in financial statement as well. Firstly, the thesis clarifies correlative theories on control of financial risk and leverage theory, builds the theoretical frame about control of financial risk. Secondly, the thesis carries on positive research on proper degree interval of leverage: selecting 69 listed companies of medical and biological products industry as the research object, setting a standard on company's proper financial risk for further studying. Thirdly, the thesis makes analysis as follows: internal deep analysis of the same industry including degree of leverage decomposable comparison and years'trend analysis, comparison analysis between two different industries by selecting 75 listed companies of chemic raw material and chemic product manufacture industry as the other research object in order to discuss various industries'financial risk, profoundly comprehending the applying of leverage analysis method with examination in truth. At last, based on the foregoing positive research, the thesis puts forwards some suggestions to control corporation's financial risk.The thesis does deeply the practical research of microeconomic leverage by positive research in order to demonstrate leverage's usefulness and notice questions when using the tool, furthermore, through using the tool much more, corporation runners could improve the financial risk management level of corporation.