Risk Measure Of Trusting Financing

With the rapid development of the trust industry in China, trust financing becomes one of the main financing approaches for companies. The risk and the risk management of trust financing attract more and more importance. The study of risk assessment is not only good for improving the level of risk management, but it has great realistic meaning for company health development.While previous studies are from trust company perspective, the study is from financing company perspective in this article. First, based on the reviews of research literatures at home and abroad regarding risk assessment of trust financing, the article introduces the current situation of trust financing and analyzes several problems related to risk assessment of trust financing. Then it introduces Jinggu Forestry and basic overview of its trust financing plan. After that, according to the general process of risk management, I assess the risk of financing failure, trust companies breaking contracts, liquidity and cashing with theoretical models and financial metrics from company financing perspective. Finally, I estimate the probability of company financial distress after trust financing with the KMV model, and reach the conclusions:(1) companies should pay attention to quantitative methods and apply theoretical models to objectively assess the risk.(2) Companies should analyze its own financial situation with models and objectively assess the probability of successful trust financing before implement financing.(3) Companies should objectively assess the liquidity of financing and assets with financial ratios when assessing liquidity risk.