Building Of Financial Risk Index System For Growth Enterprise Market’s Listed Companies

Since October23,2009, the Growth Enterprise Market open board in Shenzhen, the number of companies listed on the GEM has grown from28to350in less than3years, which achieves the growth by leaps and bounds. The growth enterprise market is an important part of Chinese capital market, and it focuses on small and medium-sized high and new technology enterprise of high-growth, high-risk, high-tech, new economy, new services, new agriculture, new materials, new energy and new business models (i.e.,"six new,three highs"), especially providing the financing channels for them and providing exit mechanism for venture capital, the gem companies is different from other markets’characteristics, and their identical points are that barriers to entry is low, the company scale is small, high p/e ratio distribution, high-tech and high-growth, with independent intellectual property rights, which makes GEM’s financial risk is higher than the Main board’s.The purpose of this article is to build a financial risk index system and provide a financial risk assessment method for GEM listed companies, so that enterprises can identify the risk in the process of operation and management in time, and take corresponding measures. The main content of the article is a summary of the existing research from three aspects:the GEM market, GEM listed companies’financial risks and enterprises’financial condition assessment methods. On the basis of previous studies and the characteristics of the gem listed companies Analyze the content and characteristics of gem listed company financial risk from the investment risk, financing risk and liquidity risk. And find out the causes of financial risk from two aspects:the enterprise internal part and external part. Deconstructing the influencing factors of financial risk based on the analysis of contents, characteristic and causes of financial risk. Under the guidance of design principles of financial risk indicators, we build the financial risk index system of GEM listed companies. The system reflects the gem listed companies’financing risk, investment risk and liquidity risk from the enterprise’s capital and asset structure, technical level, growth ability, profitability and turnover ability synthetically and uses expert investigation method to determine the weight of each index in the index system and the index level. When we use the financial risk index system, we can take the BeiLu pharmaceutical manufacturing enterprises for example, and choose the enterprises whose value smaller than10to be samples among the pharmaceutical industry, Based on the2012annual report of sample companies, calculate and determine the critical value of each index respectively, then identify financial risk the enterprise faces through comparing the BeiLu pharmaceutical’s financial index with the critical value. Based on the financial risk which is recognized by the index system, seek out specific measures to prevent and deal with financial risk standing on the angle of listed companies’ managers and provide reference opinions to improve the system of financial management for listed companies at the same time.Based on above mentioned background and research purpose, this paper will be divided into four parts. To analyze financial risk, and to build and use the index system of gem listed companies’ financial risk from the following four aspects:The first part aims to clarify topic’s background, basis and the practical significance of the study, summarize the existing research from three aspects:the GEM, GEM listed companies’ financial risk, evaluation method of enterprises’ financial risk, and summarize the content and thinking of research.Second part, analyze GEM listed companies’ financial risk by linking enterprises’policy environment, industry characteristics, growth stage, enterprise scale and the management system, mainly from the content characteristics and the internal and external causes of GEM listed companies’financial risk.Third part, identify design principle of financial risk index. According to the features of the growth enterprise market, we classify the financial risk indicators, and then, sort out the core indicators and additional indicators, determine the weight of each index, and build the GEM listed companies’financial risk index system.At last, establish critical value of index, and compare the index with critical value of index regularly. Find out measures to prevent financial risk on the basis of changes of index and index critical value. Thereby, improve the GEM listed companies’financial management system.The innovation of the article is to build a financial risk index system on the basis of GEM listed companies’practice, rather than take a financial risk index system from the main board directly, which can reflect the gem listed company faces financial risk more accurately. Another innovation is that the index critical value has more reference value, because the index critical value is determinate by the same size companies which are in the same industry. Due to the defects of knowledge structure, there are many shortcomings in the thesis. For example, choosing the subjective expert score method to determine the weights of indicators, rather than the more quantitative method-Analytic Hierarchy Process. In addition, the financial risk index system may be inadequate.