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Research Based On The Cash Flow In Enterprise Credit Rating

Posted on:2010-07-23Degree:MasterType:Thesis
Country:ChinaCandidate:C Y SunFull Text:PDF
Abstract/Summary:PDF Full Text Request
Bank-to-business credit rating affects the accuracy of the size of its credit risk, and on the current China's banking industry enterprise credit rating system perspective, there are still many questions. Quantitative financial perspective, their indicators are set mainly in the accrual basis, around the balance sheet and income statement for the relevant indicators to evaluate. However, the accrual basis under the profit target of inherent limitations:Easy to manipulate earnings management authorities to carry out cosmetic report, bank credit to the detriment of the borrower enterprises to judge the true solvency, and thus give rise to inaccuracies in the evaluation results, and increased the bank's credit risk. From this perspective, this paper presents information based on the cash flow of enterprise credit rating.Cash flow is based on the information of the real, objective and verifiable, it is not related to the accrual basis of subjective judgments. Enterprise management is less susceptible to manipulation, so it can provide information on business transactions in the main objective, consistent and neutral financial information. From the creditors point of view the cash flow of information can better provide enterprise solvency signal. Business debts need the cash repay, therefore, it is the best proof of solvency that the enterprise has enough cash stock or possession of a very strong ability to access cash businesses. Cash flow analysis will be applied to enterprise credit rating, the rating will help improve accuracy to reduce the bank's credit risk.In this paper, it stands in the creditor-the bank's point of view to build a rating system, and the enterprise credit rating carries out from a micro-level. Discussed the introduction of a corporate cash flow need for credit rating, and analyzed the structure of cash flow and cash flow stability of the impact of credit rating companies. At the same time, used the time series of the second moving average method for enterprises to predict future cash flow, and analyze the prediction results in quantitative and qualitative aspect. Constructed financial indicators of enterprise credit rating system based on the cash flow. In the financial evaluation index layer add the cash flow information indicators, together with the traditional indicators constitute a new rating system indicators. And apply the principle of entropy method analysis of selected pharmaceutical manufacturing industry,10 enterprises in the financial data were analyzed. The results show that cash flow information to reflect the amount of information is effective, add a new index for the cash flow to make a rating system more objective and accurate.
Keywords/Search Tags:credit risk, enterprise credit rating, cash flow information, entropy method
PDF Full Text Request
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