Household Electrical Appliance Enterprises Financial Risk Assessment Under The Protection Of Working Capital Capability

Home appliance industry after 30 years of rapid development, has become a pillar industry in China. Household electrical appliance enterprises as a capital-intensive industry, either in production or in the wholesale segment as well as to the final retail sectors, will require substantial operating working capital, working capital management such difficulty increases. Plus, the appliance industry raw materials, rising labor force, the end of the national policy of stimulating market demand for home appliances is saturated, the main business income decline, cash flow from operating activities decreased, unsustainable production and business activities so that the financial risk becomes higher household electrical appliance enterprises, which seriously affected the company’s survival and development. However, some household electrical appliance enterprises and foreign rating agencies to assess the financial risks are mostly from the solvency of view, that its good operating condition, the possibility of lower financial risk. Whether such a huge contrast to the international rating agencies to assess the design of indicators of local adaptation, or the domestic rating agencies to assess the design of indicators for scientific and systematic, is a severe test. Therefore, this article select working capital guarantee from the Viewpoint of household electrical appliance enterprises financial risk assessment studies to help enterprise managers, creditors, investors, auditors and other stakeholders are better able to identify financial risks and timely make the relevant decisions.In this paper, the concept of financial risk associated starting point for the industry, household electrical appliance enterprises to analyze factors influencing household electrical appliance enterprises financial risk. Selected China’s Shanghai and Shenzhen A shares of 29 listed companies in the appliance samples to working capital guarantee capacity perspective, the use factor analysis to construct a model of household electrical appliance enterprises financial risk assessment, and the results were tested, the overall evaluation of the status of these household electrical appliance enterprises financial risk. Case by Case portion Meiling factor scores weighted comprehensive evaluation of horizontal analysis results, Meiling in the downstream position in the appliance industry, the financial risk of the enterprise has been at a high level. Then, select the Meiling from 2010 to 2014 five-year financial data indicators longitudinal analysis concluded that Meiling profitability is weak, increase profit growth and cash flow does not match, inventory, accounts receivable occupancy the enterprise a lot of liquidity, the whole range of their products low grade, not mastered the core technology, the future is not strong, the higher the possibility of financial risk.