The Relevance Of Financial Risk And Enterprise Value Research Based On Life Cycle

The goal of financial management is to maximize the enterprise value,financial risk influence the realization of enterprise value directly. The financial risk characteristics of enterprise will be different in its different life cycle development stages. So we need to study the relationship between financial risk and enterprise value in different development stages from the perspective of life cycle.Firstly, the article defines the concept of enterprise life cycle, financial risk and corporate value, and analyzes the relationship between financial risk and enterprise value in different development stages. On the basis of theoretical analysis, this paper puts forward a series of hypothesis about the relationship between financial risk and enterprise value in different life cycle stages, carries out empirical research, selects the Shanghai and shenzhen a-share listed companies from 2011 to 2013 as sample, the total of 1112 enterprises. Then the paper screens and classifies the samples, divides samples into growth, maturity and decline three phases according to the relationship between enterprise revenue growth rate and industry average revenue growth rate, uses SPSS software to do descriptive statistics analysis, correlation analysis and regression analysis about financial risk and enterprise value for each life cycle sample respectively.It is concluded that:the financial risk which influence enterprise value is different in different development stages, the financial risk which influence enterprise value in growth phase is financing risk, investment risk, cash flow risk;The financial risk which influence enterprise value in maturity phase is financing risk, investment risk,capital recovery risk, cash flow risk; The financial risk which influence enterprise value in decline phases is financing risk and cash flow risk. The relationship between financial risk and enterprise value is different in different development stages of enterprise, namely the positive and negative correlation between financial risk and enterprise value is different in different development stages.Finally, combining the empirical analysis result, the paper put forward corresponding countermeasures about how to control financial risk and improve enterprise value according to financial risk characteristics of enterprises in different life cycle stages. Growth enterprises should increase investment and debt financing ratio, provide sufficient cash for rapid development of enterprise,keep a rational cash flow; Mature enterprises should reduce debt ratio appropriately, accelerate the use efficiency of enterprise assets, reduce the cost level; Decline enterprises should accelerate to get investment back and liquidate assets, prevent serious loss of cash flow.