Research On Financial Risk Evaluation And Response Of BYD

Recently,our country has released many preferential policies,such as subsidies for new energy vehicles and exemption from vehicle purchase tax,which has led to the rapid development of the new energy vehicle industry.This has also led to the transformation of automobile manufacturers into new energy vehicles,making the market more competitive.While injecting vitality into the development of the industry,relevant national policies have also led to frequent frauds or illegal attempts by some new energy automobile manufacturers to obtain financial subsidies,seriously disrupting the fair competition in the market.In order to regulate the new energy vehicle market and promote the healthy and stable development of the new energy vehicle industry,the state has adjusted the policies of the new energy vehicle industry since 2017.The main measures include: constantly shrinking fiscal subsidies,raising the threshold of entry for new energy vehicle products,etc.Great challenges are faced by new energy vehicles.Facing the severe market environment,enterprises must improve their awareness of risk management,especially financial risk management,and cope with the changing market environment by controlling their own financial risks.Financial risk assessment is an important component of financial risk management,and it is beneficial for company to make a correct assessment of their financial risk status,and to take timely control measures to reduce the impact of financial risk when uncertain factors occur.New energy cars has been expanding rapidly under the aegis of policies and the enterprises' own efforts,but there are not many studies on new energy vehicle enterprises by scholars at present,especially on financial risk assessment.In our new energy automobile industry,BYD can be counted as a leader in the industry,which began research and development of new energy vehicles in 2003,and its new energy vehicle business becomes bigger and bigger with the country attaches more importance to the new energy automobile industry.Yet BYD is still facing the risk of falling debt paying and profit earning ability.So this text takes BYD as the research object of the financial risk assessment and response,hoping to be helpful to reduce it' s financial risk and enhance the ability of controlling risks.Moreover I hope it can be useful to other companies in this industry,which facing financial risks.Firstly,this paper analyzed the financial indicators of BYD from 2013 to 2017,identified the financial risks faced by BYD.Secondly,I found the financial risk evaluation index system by collecting the company' financial data from 2013 to 2017,the financial risk of BYD was evaluated by factor analysis method,and the evaluation results were compared with the actual situation to verify the effectiveness of factor analysis method.And then the causes of its financial risks are studied from external and internal factors.Finally,according to the results of the above research,the paper puts forward some countermeasures for BYD to deal with financial risks,such as promoting technological innovation,optimizing capital structure and controlling the scale of accounts receivable.Through the above study on BYD's financial risk evaluation and response,this paper draws the following conclusions: BYD does have risks in financing,investment and operation.Based on the assessment of their financial risk,it is found that the financial situation of the firm in 2013,2014 and 2015 seems not so hopeful.Although the financial situation has improved in 2016 and 2017,there are still risks of insufficient operating capacity and growth capacity.The causes of financial risks include external factors such as the decline of government subsidies,the intensification of industrial competition,the poor recognition of consumers to new energy vehicles,as well as internal factors such as unreasonable debt term structure,poor income from investment projects,large receivables and inventory scale.