Financial Risk Evaluation System Research On Chinese Listed Real Estate Companies

There is a high profit margin in real estate market by the year of 2008, a large number of enterprises enter this industry by simply developing residential buildings to take a share of the spoils. However, by 2014, the general situation of excessive residence makes it hard to make a profit. Real estate enterprises face many problems, such as long-cycle fund collecting, refinance difficulty and slow rise of house price. The significance of this paper is to put forward solutions on reducing the financial risk of the listed real estate companies by analyzing its status and recognizing specific risk under such a macroscopic background.The listed real estate companies in China already have some findings in regard to its financial risk evaluation and prevention. The main content of the paper is analyzing which indexes can be used to evaluate the financial risks based on previous findings and open annual report in 2008-2013 of the listed real estate companies, combined with the market and national policies. Then narrow them down by practical research method. The paper chooses both financial and non-financial index, establishes a financial risk evaluation index system, builds a risk early-warning model, comes up with the conclusion that evaluation index selection should be comprehensive, should be focus on financial indexes such as main business interest rate and inventory turnover ratio, plus the macro-economic indexes such as gross regional production, increasing amount of real estate industry and the average retail prices of commercial residential building. The suggestions and solutions in the paper aim to help the operator, the investors and the policy-makers of the listed real estate companies. Hoping the study may provide them with some guidance and help.