Steels Industry's Accounts Receivable Financing And Its Operational Risk

At present,China's iron and steel enterprises are in the critical period of transformation and upgrading,they are facing the situation that the traditional financing channels are limited.Accounts receivable financing is a popular financing method in recent years,which provides a feasible financing way for enterprises whose traditional financing channels are blocked.Iron and steel enterprises have more than 100 billion accounts receivable.Under the circumstances of insufficient internal funds and hindered external credit,it is particularly important for them to actively use accounts receivable for financing.However,some of the financing service institutions' evaluation is still not based on the characteristics of accounts receivable financing,using the source of repayment and the quality of accounts receivable as the main research object,but which is based on the financing demand side,it leads to the risk of accounts receivable financing.Therefore,the financing service institutions is insufficiently understanding the risk,and the enthusiasm of providing accounts receivable financing services to iron and steel industry is not high,and accounts receivable financing cannot play a good role to solve the financing difficulties of iron and steel enterprises.In addition,the steel industry is in a period of structural adjustment when the companies try to reduce theirs overstocking,overcapacity and high leverage.Although the industry's overcapacity has made breakthrough progress,the high leverage is still a prominent problem,and the financing service institutions still do not fully understand the overall quality of accounts receivable in the steel industry,and have a general problem of insufficient and comprehensive understanding of the risks of accounts receivable financing.Therefore,this paper analyses the current operation situation,domestic and foreign environment and the quality of accounts receivable in China's iron and steel industry,and studies the risks in connection with specific accounts receivable financing projects,so that the financing service institutions can fully understand the financing risks of accounts receivable in the iron and steel industry.It can also ease the financing product providers to the steel industry,improve the efficiency of financing risk management.Based on it,this paper has four steps to analyse the financing risk.Firstly,it introduces the background of the research topics,its importance,the current situation of the research.Secondly,it expounds the basic concept of accounts receivable financing and its advantages,then it introduces three main modes of accounts receivable financing method.Thirdly,relied on the risk management theory,by analyzing the data of the 46 steel listed enterprises,it is tried to identify the factors which is lead to risks,then it is concluded that there are many factors that induce the financing risk of accounts receivable in the steel industry.Finally,combined with a case,it try to find out the factors which induce risk in the perspectives of the source of repayment and the financing demand,then summarize the risk of financing service providers providing accounts receivable financing services to the steel industry and put forward suggestions.