Research On The Financial Risk Management Of The Buyer's Credit Guarantee Cycle Of Yizumi Precision Machiney Co.,Ltd

Under the background of global economic downturn,poor sales performance and slow recovery of funds have become a problem faced by many manufacturing enterprises in China.Furthermore,manufacturing industries are experiencing a transformation and upgrading,funds is an urgent problem to be solved for the entire manufacturing industry chain,especially For SMEs that are in "financing difficulties".The buyer's credit guarantee business emerged as one of the means by which upstream companies helped downstream customers to solve their financial problems and improve its own sales performance.However,due to the large credit risk of SME customers,if these customers are breached,it will inevitably trigger a crisis in the capital chain of the company.How to effectively manage the financial risks in this business is an issue for companies that adopting this business.Yizumi is a company listed on the Growth Enterprise Market in Foshan,Guangdong Province.It specializes in the field of molding equipment manufacturing.Its main products include injection molding machines,die casting machines,rubber injection molding machines and other production equipment.In order to improve performance and speed up the recovery of funds,Yizumi began using the buyer 's credit guarantee business in September 2016 to provide guarantees for downstream SME customers to help them obtain financing for the purchase of Yizumi's Products.On the one hand,in practice,with the help of the buyer's credit guarantee business,Cixing has become the leading company in the knitting machine industry.However,Cixing has also fallen into a serious black hole in the fifth year after the implementation of the business.On the other hand,Although Yizumi equipped the business with a set of financial risk management system,but it was similar to the management plan of Cixing,they cannot effectively manage financial risks.For example,in the aspect of designing the terms of the agreement,the regulations on the amount of guarantees,the term of the loan,and the proportion of the down payment are not detailed enough to fully reduce the financial risk.In the credit rating of the customer,the characteristics of the SMEs and the willingness to pay the debt are not considered;The breach of lawsuit procedure cannot control customers'assets for debt repayment at the first time;accounting treatment methods and disclosure of financial statements cannot reflect the economic nature and the underlying risks of the business.This article combines the financial risk management theory with the buyer's credit guarantee business and focuses on the issues that emerge from the financial risk management procedures in Yizumi.It will use technical measures,such as decentralization,risk transfer and risk compensation,to propose corresponding optimization plans to provide a reference for Yizumi to effectively manage the financial risks of the buyer's credit guarantee business from the aspect of risk identification,risk assessment,risk control,and risk disclosure.At the same time,the research content has a very good industrial pertinence and can be used by other industries.