Research On Cash Flow Risk Management Based On Value Creation

Cash flow has a dual nature, and under certain conditions, be transformed into each other. The one hand, cash flow plays a key role in the enterprise’s value creation activities, without the participation of cash flow, enterprise value creation activities cannot be carried out. The other hand, cash flow is the focal point of the enterprise risk, the risk of cash flow restricting corporate value creation activities carried out smoothly, even when serious enterprise value may be completely damaged. Value creation also related to business prospects for the development, management of cash flow risk is very important.Enterprise risk management theory as a context to understand and evaluate the cash flow risk management practices from the perspective of value creation. First, this paper discusses the objectives of the cash flow risk management. In the cash flow risk management, companies must focus on cash flow to create value and damage to the value of double features, and should be based on security and create value property of the guiding objective of the enterprise cash flow risk management.Second, this article details the entire process of cash flow risk identification, assessment and response from the perspective of value creation. In the course of business, enterprise needs to identify and determine the internal and external inducing factors of potential risks, clear cash-flow risk, process risk, flow direction and flow rate risks, and to predict the risk may be the losses caused to the enterprise; on the basis of qualitative analysis, enterprise should build a cash flow risk assessment index system composition of debt service cash flow, liquidity, growth, efficiency and profitability, more full to reflect the essential characteristics of the cash flow risk, in order to form a basis for how to manage the risk of cash flow; managers cannot always eliminate the risk of cash flow, but through the establishment of effective strategic level and tactical level risk coping mechanisms will be cash flow risk control at a reasonable level. In addition, in order to effectively deal with the cash flow risk, we must build a safeguard mechanism to deal with the necessary risk.Finally, this paper makes a case study on Eastern Airlines cash flow risk management in accordance with the cash flow risk management ideas and systems of this article discussed. In the Eastern Airlines cash flow risk management real-life case, cash flow risks can not only evading but using ideas reflect the exception clearly, effectively managing cash flow risks can significantly facilitate the promotion of enterprise value.