A Case Study On NH Airlines Company Financial Risk Management

With the rapid development of market economy, the connection of Enterprises in various countries is getting more and more frequent. Financial risk management has become one of the core contents of improving the competitiveness of enterprises. Since the international financial crisis, China’s air transport industry is slowly waking up from the heavy losses and showing a rapid development trend. Although faced with rare opportunities for development, a lot of financial risk events have been staged. This is closely related to the neglect of financial risk management in Chinese enterprises. By the macro environment, industry characteristics and the company’s own operating activities and other factors, compared to the majority of domestic companies, the airline’s financial risk management is more important. Therefore, the research on the financial risk management of airline companies is more realistic.The theory of financial risk management is the guideline and NH Airlines Company is the research object in this paper. First of all, use the report analysis method to identify the financial risk of the NH Airlines Company in terms of financing, investment, working capital and income distribution. Secondly, according to company financial data for the 2010-2014 and 2015 air transport industry performance evaluation criteria, and use efficacy coefficient method to make risk assessment and early warning analysis of NH Airlines Company financial indicators, and sum up the financial risk grade of NH Airlines Company. Finally, according to the financial risk management of NH Airlines Companyissues arising in the financial risk management, in reply to NH Airlines Companyissues put forward effective improvement measures.The following conclusions are drawn from the research of the full text: NH Airlines Company has a variety of financial risks and financing risk is the most serious. NH Airlines Company has the low ratio of flow rate and velocity, the high capital debt rate, unreasonable debt maturity structure, and the excessive use of management level and finance level. These characteristics make the company have a greater risk of financing. In addition, the external risk, such as excessive investment risk, fuel cost risk and exchange-rate risk will have a larger impact on the profitability of the business and the risk of profit distribution will gradually appear in the future. Therefore, this paper puts forward the measures to improve the financial risks of NH Airlines Company, such as improving the capital management mechanism of enterprises, establishing the financial risk assessment and early warning mechanism, controlling the size of the expansion of enterprises, using hedging appropriately and controlling corporate debt ratio and leverage.The innovation points of this paper are as follows: In this paper, combined with the actual situation of NH Airlines Company and industry characteristics, select the financial index of a company representative; construct the NH Airlines Company Of the financial risk assessment and early warning model. In the process of building model using the efficacy coefficient method to select the financial index and the index weight of quantitative and qualitative analysis, so as to improve the financial risk assessment and early warning model is practical and scientific. The efficacy coefficient method of this paper is on the traditional methods in combination with the actual situation of NH Airlines Company select index was improved, and combining with the industry performance evaluation standard in 2015 for the company’s financial risk assessment and early warning analysis, made Airlines Company in complex competition environment with “uncertainty” can be done in the effective evaluation and early warning of risk, to reduce the influence of the financial risk of enterprise. Through the study found that: the efficacy coefficient method can be carried out on the air transport enterprise financial risk comprehensive early warning, timely to avoid the potential financial risks exist in the process of enterprise management. For the whole industry to build the financial risk assessment and early warning model provides a strong support.