Research On Financial Risk Control Of XH Military Company

China's military enterprises have always played a very important role in the socialist construction and the modernization of national defense,and they are also an important part of China's socialist market economy.At present,China's military industry has entered the phase of military and civilian integration,in which military enterprises stride into the civilian sector and participate in market competition.Although the competition in the market is fierce,the growth rate of China's defense expenditure has been declining year by year,resulting in military enterprises conducting self-financing and reducing their dependence on national subsidies.Therefore,military enterprises are confronting with varied risks during the period of reform.In order to ensure the healthy development,military enterprises must establish a sense of financial risk and reasonable risk response.The thesis selects XH Corporation as the research object,and analyzes the aspects of financing,investment,operation,and cash flow according to the characteristics and background of the military industry.The thesis assesses the level of financial risks and figures out problems in financial condition that need to be solved as follows: in terms of financing,the national subsidies have been reducing year by year,and the variety of financing is relatively simple;in terms of investment,the structure of internal investment is relatively unreasonable,and the profitability of assets is low.In terms of operation,the existence of excess capacity and excessive inventory results in poor capability of realization of inventory.In terms of cash flow,the company's high-level ratio of liabilities and relatively large scale of liabilities reflect the stress of cash flow,which is worsen by the further expansion due to the background of military and civilian integration.The thesis analyzes the causes of its financial risks from the aspects of external and internal environment of XH Corporation including financing,investment,operations,and cash flow.The extent of the current financial risk of XH Corporation is obtained by the following means: the Delphi method to survey experts in the same industry;the analytic hierarchy process(AHP)method to acquire the weight of the importance of the relevant financial risk indicators;and the efficiency coefficient method to quantify the risks.Finally,feasible suggestions and specific measures for risk control are proposed for the problems existing in the XH Corporation in terms of financing,investment,operations,and cash flow,such as diversifying financing methods,establishing investment decision-making departments,delegating the issue of investment to expert agencies,and keeping files about credit accounts.Other choices include the supervision of accounts receivables about related transactions in the group,the separation of major and minor business of civilian products,the optimization of product structure as the response of the government's appeal,and the establishment of finance companies in the group.