The Study On Enterprise Financial Risk And Prevention

As the rapid development of the capital market in China during recent years, many large-scale group companies, especially these public-traded companies, have gradually transferred the operation and management from the asset-management-dominated model into the capital-management-dominated one, entering a finance-oriented corporate management stage. Under such an economic background, companies pay more attention to the financial management, which therefore has become the core issues of corporate management. One of the most important issues of the financial management is that companies are facing to is the management of financial risks.Financial risk focuses on the management of uncertainties in companies' financial operating effects. Financial risks, basically speaking, refer to a variety of unpredictable and uncontrollable factors in the financial system existing objectively, which result in the fact that the financial benefits actually deviate from the expected financial benefits, causing the losses of the financial benefits. From the economics point of view, as a microeconomic risk, the modern corporate financial risk is the currency manifestation of all risks that companies faced, which is the concentrated on expression of all risks.The magnitude and the degree of the losses resulted from financial risks directly demonstrates the changes of the corporate financial revenue and expenditure, finally representing the decrease of corporate financial benefits. The modern corporate financial risks have been involved in all aspects of the companies' financial activities, including capital raising, capital investments, capital running, capital recovery and capital income distribution, movements of foreign currency exchange rate, etc. In terms of corporate financial risk management, the reasons why some well-known domestic and foreign companies ran bankruptcy lie in either mistakes made in investment decision or failure to keep a close eye to, or even ignorance, the existence of financial risks. So the research in awareness, prevention and control of the financial risks has become an important subject. The study of the corporate financial risk management is not only theoretically but practically significant.This paper concentrates on the corporate financial risks, as well as the corporate financial risk management. and summarize by its interpretation of the norms and research methods. The full paper is divided into six parts. The first section of the paper briefly reviews both the domestic and the foreign research progress of the corporate financial risk, and the significance of financial risk prevention is incated. The second section is about the rationale of financial risk management, indicating the characteristics, classification, and resources of the corporate financial risks. Next part is the identification and analysis of enterprise financial risk. In the following section, the paper illustrates the prevention and control of corporate financial risks involved in financing risks, investments, capital recovery, and income distributions. Chapter V is mainly summarized financial risk prevention measures from the perspective of system, study on preventing the risk of ways and means for the enterprise's financial system, and provide more scientific risk prevention mechanisms; Chapter VI is major researching in enterprise financial risk warning Construction mechanism, and sum up an evasive risk, lower risk, spread risk, transfer risk, self-protection risk, debt restructuring of early warning methods, propose to build an early warning mechanism ideas for corporate financial risk.The innovation of this paper is made an early warning mechanism idea for corporate financial risk by the Government leading, broadly participation of enterprises, creating jointly. Inadequacy of the paper is mainly lack of empirical research, and it is only a framework of building new ideas to enterprise financial risk for early warning mechanism, but also to be further in-depth study.The purpose of writing this paper are to do a comprehensive understanding of enterprise financial risk management firstly; Second is to further familiarize and master preventive measures to control financial risk; At last, to play the role of reference, to let more experts and scholars put technological achievements in modern forefront of research to the wider use of financial risk management.