Research On Financial Risk Early Warning System Of K Real Estate Company Based On Efficacy Coefficient Method

With the development of complex economic environment,corporate financial risk attendant to become an extremely important business development focus.Although the sources of risk of the company is not limited to the financial aspect,but mostly a source of business failure began from the weak financial risk control.In recent years,the growth of the real estate industry in China slowed.But because of the large amount of investment,long investment cycle,weak liquidity characteristics,industry financial risk has continued to increase,coupled with the industry policy environment has become increasingly harsh.Real estate company need to avoid possible financial risks through an effective financial early-warming system.In this paper,the research object of K real estate company is a collection which takes real estate development and operation as the main business.The existing job of the financial risk early warning method is relatively simple,the lack of effective and has not formed a financial risk early warning system in the company,so it cannot prevent the occurrence of financial risk.In the construction of financial risk early warning system for K,it based on the current situation that differences between the different sectors of the industry is even more obvious,the original universal system of early warning indicators and early warning models have been unable to meet the company`s own needs,therefore,this paper selects the efficacy coefficient method as the method of constructing the financial risk early warning system of K company.Firstly this paper reviews the domestic and foreign enterprise financial risk early warning and analyzes the application of the efficacy coefficient method in the financial risk early warning.Secondly,it combines with the analysis of K company`s operating status,financial operating status,financial risk and early warning situation,and points out the problems existing in the financial risk problem in the job,then it introduces the necessity and feasibility of establishing financial risk early warning system based on efficacy coefficient method.Again according to the characteristics of K company and its industry characteristic,selects 16 financial indicators and 6 non-financial indicators by using Pearson correlation analysis to build early-warning index system,and the assignments of the early warning index by using expert scoring method and AHP,at the same time it makes some appropriate improvement to the efficacy coefficient,and the evaluation standard value and the warning interval are determined,and the effectiveness of the method is verified by horizontal and vertical test.Finally,to calculate and analyze the financial early-warning situation of K company in 2011-2015 by using the efficacy coefficient method,it finds the potential financial risks exist in the company and the future trend of financial risk;at the same time,the corresponding risk prevention measures are given for each link and the whole enterprise risk situation.It can help the company to reduce the financial risk and keep the company healthy and stable.