A Case Study On The Relationship Between Product Market Competition And Corporate Cash Flow Risk Of X Company

Cash flow risk management can monitor the operation of corporate cash flow,the stable operation of the enterprise’s cash flow can affect the stable and healthy development of the whole capital market.The survival and development of an enterprise is closely related to the competitive market environment;it is also influenced by other firms,which will be reflected through cooperation and competition;Product market competition will lead to competitive behavior of enterprises,causing fluctuations in production and operation,and ultimately reflected in the abnormal fluctuations in cash flow,causing cash flow risk.The existing research found that the degree of product market competition was negatively correlated with the cash flow risk of the firm.To the product market competition on the impact of corporate cash flow research mostly emphasis on theoretical exposition and empirical analysis,and in the theoretical analysis based on the case study of the literature is still very little,therefore,this paper analyzes the possible relationship between product market competition and corporate cash flow risk through case analysis.The research methods used in the whole article are literature research,normative research,case analysis and rate analysis.First of all,the cash flow risk and product market competition in domestic and foreign literature to sort out and analysis.For the cash flow risk from the influencing factors and measurement methods to sort out the two aspects of the literature,the specific study of the financial indicators,volatility indicators and risk measurement in the three methods.For the product market competition,the two branches of the modern competition theory,the looting effect and the governance effect.On this basis,the literature on the relationship between cash flow risk and product market competition is collated.And then based on the theory of enterprise risk management,information asymmetry theory and predatory theory.On the basis of theoretical analysis,the relationship between product market competition and cash flow risk is investigated by case analysis.To X company as a case analysis of the object,select the 2007 to 2015 financial data for the sample,the cash flow risk of X company and the product market competition to measure,and study the trend of the two,to examine the relevance of change.The study found that X company to meet the increase in product market competition,corporate cash flow risk reduction that the product market competition and corporate cash flow risk was significantly negatively correlated.The results show that the relationship between product market competition and cash flow risk can be reflected in individual companies.