Study On The Enterprise Forewarning Index System For Financial Risks

The ever-deepening globalization is now providing enterprises with more opportunities, as well as imposing fiercer competition. Given the constantly changing environment, businesses are faced up with increasing uncertainties and growing risks. How to adapt to the changing conditions, navigate in cutthroat competition and flourish is a serious problem faced up by the managers.The forewarning system against financial risks is an effective solution to such problem, because any risk outbreak will be in the form of financial crisis, but only after a gradual deterioration. The forewarning indicator system against financial risks is the barometer of this process. If managers take forewarning analysis of the financial situation, they may possibly find the pitfalls in the financial system beforehand and take effective measures to avoid risk outbreak.On the basis of present theories of financial management, financial forewarning system and practical research, the paper is intended to explore the status quo and application of financial risk forewarning system home and abroad and get to know the void in this field. Based on the theories of financial management, accounting and statistics, the paper proposed a creative forewarning index system which took into account four aspects of financial management, financing, investment, operation and distribution. According to this idea, relevant concepts concerning financial risks and forewarning system are defined. To begin with the risks in financial activities, based on their sources, risks are classified into four aspects according to the financial circle, namely financing risk,investing risk,operating risk and distribution risk. Furthermore, based on the purpose and principle of establishing forewarning system, functions of financial forewarning system are specified. With reference to some common financial index, the paper established four sets of forewarning index system of financial risks according to the risk type and then used the efficacy coefficient method, Fuzzy AHP and questionnaire to set up a primitive forewarning model against financial risks. In light of the financial risk forewarning index and model, this paper examined all shipping companies listed at Shanghai and Shenzhen of our country, calculated the efficacy coefficient of each company and analyzed the results to verify the rationality and validity of the forewarning index system designed. In the end, this paper put forward some measures and recommendations to strengthen the forewarning system of enterprises.